Consulting firm travel and expense policy: a template

1. Purpose and scope

This policy covers how [Firm name] pays for and repays business expenses, including travel, and which it bills to clients. It applies to [all employees] [employees who travel for client work]. It is meant to be an accountable plan under IRS rules, so reimbursements under it are not wages unless it says so.

2. Client-billable and firm expenses

2.1 A client-billable expense is one for a client’s work that its engagement letter or contract says it will pay.

2.2 Everything else is a firm expense, such as [business development], [training] and [internal meetings].

2.3 The firm repays approved business expenses whether or not a client pays for them.

Note: Rent, insurance, shared software and other overhead belong in your fees, not on a client’s bill.

3. The client’s travel policy comes first

On a billable trip, follow this policy or the client’s, whichever is stricter; [your engagement manager] shares the client’s terms before you book. Anything above the client’s limit needs approval from [title] first; the firm repays it but doesn’t bill it.

Note: What a client won’t pay, the firm absorbs, so apply a client’s cap before booking.

4. Booking travel

4.1 Fly economy [on flights under [X] hours] [; above that, business only where the client allows it].

4.2 Book at least [14] days ahead when you can, through [booking channel], at the lowest fare that fits the schedule. Personal upgrades and change fees are yours.

Note: On federal contracts, airfare above the lowest priced fare is unallowable unless a listed exception is documented (FAR 31.205-46(b)).

5. Lodging

Stay near the client site at up to [the client’s cap] [the federal lodging rate for the city and month] [$[X] a night], taxes [included] [extra], and submit the itemized hotel bill. Personal charges are yours.

Note: GSA’s lodging rates exclude taxes; say whether your cap does.

6. Meals

6.1 Your own meals while traveling overnight are repaid up to [$[X] a day] [the federal meals and incidentals rate for the city] [their reasonable cost].

6.2 A client meal needs a business purpose, someone from the firm there, and every attendee’s name, company and title; it is repaid up to $[X] a person [, more with approval from [title]].

6.3 Alcohol: [choose one]

• [Option A: never repaid.]
• [Option B: repaid with a client meal up to $[X] a person, never billed to a client unless the engagement letter allows it.]

Note: Business meals are 50% deductible. The engagement letter can name who takes that limit on reimbursed meals; if it names no one, the client does only when the letter says it reimburses meals and the firm sends the receipts. Alcohol is unallowable on federal contracts (FAR 31.205-51).

7. Ground transport and mileage

7.1 Use transit, taxis or rideshare where practical; rent a car [mid-size or smaller] when it costs less.

7.2 Driving your own car for business is repaid at [the IRS business standard mileage rate in effect on the date of the drive] [[X] cents a mile], plus business parking and tolls.

7.3 Driving between home and your regular office is commuting and isn’t repaid. [If you have a regular office, driving between home and a client site where you expect to work a year or less is repaid.]

Note: Anything above the IRS rate is taxable wages.

8. Receipts

Submit an itemized receipt for every hotel stay and every expense of $[X] or more [, and for every billable expense]; a clear photo or scan is fine. For a lost receipt, write down the amount, date, place and purpose [, approved by [title]].

Note: The IRS requires a receipt for lodging and for any other expense of $75 or more.

9. Coding

Code every billable expense to its client and engagement [and mark it billable]. Code firm expenses to [the firm or business development]. If you’re unsure whose an expense is, ask your engagement manager before you submit it.

10. Deadlines tied to billing

10.1 Submit expenses within [X] business days of a trip, and billable ones before [the billing cutoff, the [X] business day of each month]; late ones are still repaid but may miss the client’s bill.

10.2 Return any advance or overpayment within [120] days.

Note: IRS rules treat 60 days to account and 120 days to return any excess as reasonable; Illinois allows 30 days to submit unless the policy allows more.

11. Approval

Claims within this policy are approved by [your engagement manager] [automatically]; anything outside it needs [a partner’s] [title’s] approval, before you spend where possible. No one approves their own claims.

12. Markups and pass-through

Billable expenses are billed: [choose one]

• [Option A: at cost, with any discounts passed on.]
• [Option B: with the markup in the engagement letter, on its own line.]

[In-house costs, such as printing, are billed [at a rate agreed in advance] [at cost].]

Note: ABA ethics opinions have law firms bill third-party costs at actual cost unless the client was told otherwise; federal contracts pay what their cost principles allow.

13. Personal and company cards

[Use the firm’s card for [airfare and hotels], and repay any personal charge on it within [X] days.] [Use your own card, and the firm repays you.] Either way, every charge needs its receipt, code and business purpose.

14. When reimbursement is paid

Approved claims are paid [by direct deposit] within [X] days of approval, and never later than 30 days after you submit them, whether or not the client has paid.

Note: Iowa and New Hampshire set a 30-day limit.

15. What isn’t reimbursed

Commuting, personal travel and detours, upgrades for comfort, traffic and parking tickets and other fines, entertainment unless [title] approved it first, travel for family or friends, [alcohol outside section 6.3] and [other items].

16. Records

The firm keeps receipts, approvals and billing support for [X] years [, or longer where a client or contract requires]. Employees who hand theirs in generally don’t need copies.

Note: The IRS generally asks for three years from filing the return, and at least four for employment tax records.

17. State and local law

Where a state or local law gives employees more, such as reimbursement of all necessary expenses or a shorter payment deadline, that law applies. [List your states and cities.]