Expense claims are how you, as a business, will reimburse your employees for business-related costs such as travel, meals, client engagements, and subscriptions. What seems simple often becomes complex in execution when volumes grow, and processes are manual.
Travel and Entertainment (T&E) costs are one of the largest controllable expenses, according to the India Travel & Expense Study 2025-26 . It has also been found that many enterprises struggle with expense policy compliance and manual approval.
Both highlight the need for structured workflows to ensure accuracy, compliance, and visibility into spend. Traditional approaches to managing expense claims, such as spreadsheets, emails, and shared folders, often result in missing receipts, delayed approvals, and reconciliation challenges.
This guide explains what expense claims are, compares them to allowances and advances, walks you through the end-to-end process from submission to reimbursement, outlines key compliance considerations, including documentation, GST, and TDS requirements, and highlights practical approaches to managing this as a structured reimbursement workflow within AP rather than an ad-hoc activity.
What is an Expense Claim? An expense claim is a request submitted by an employee for reimbursement of a business expense they paid out of their own pocket while performing work-related duties. This typically will include travel costs, meals during official travel, client meetings, local conveyance, and other approved business expenses.
These are part of a controlled workflow that ensures:
The expense is legitimate and business-related The claim follows the company’s expense policy Supporting documents are available for audit readiness The reimbursement can be recorded accurately in the books Expense Claim vs Allowance vs Advance Expense claims are often confused with allowances and advances , but both serve different operational purposes and require different controls.
Type
Definition
Documentation Required
When Used
Where this is usually practised
Expense claim
Reimbursement request for business expenses paid personally by the employee
Receipts, invoices, bills, proof of payment, claim form, approval trail
After the expense is incurred and paid by the employee
Corporate expense policy, Accounts Payable workflows, internal audit and accounting practices
Allowance
A fixed amount paid to cover expected costs (with or without actual spend proof, based on policy)
Policy reference, approval (receipts may be optional depending on policy)
When the company provides standard coverage for recurring expenses like meals or local travel
HR and finance expense policy, payroll structures, internal control frameworks
Advance
Money given to an employee before spending, to cover expected business expenses
Advance request, approval, settlement proof, final receipts/invoices
Before travel, events, or planned business expenses where upfront funds are needed
Finance operating procedures, AP advance tracking, accounting and audit guidelines
What Qualifies as an Expense to be Claimed? Not every out-of-pocket payment made by an employee qualifies as an expense claim. For an expense to be reimbursed, it must be business-related, policy-compliant, and supported with sufficient documentation so finance teams can review, approve, reimburse, and record it correctly.
The expense categories and limits must also be clearly outlined in the company’s corporate expense policy documentation . Only expenses that fall within this approved policy scope should be incurred and submitted under expense claims.
Eligibility Criteria: An expense typically qualifies for reimbursement when it meets these conditions:
Incurred wholly and exclusively for business purposes Covered under the company’s corporate expense policy (category eligibility, limits, and approvals) Aligned with policy rules for limits, claim frequency, and exceptions Submitted within the permitted timeline as defined by internal policies Supported by valid documentation such as an invoice, receipt, or proof of payment Includes clear context (who, what, why, where) to help managers and finance review quickly Does not overlap with expenses already covered under an allowance or company-paid booking What Cannot Be Claimed: Even when an expense is real, it may not be reimbursable if it falls outside policy or cannot be verified.
Common non-claimable expenses include:
Personal expenses with no business justification Expenses not listed or permitted under the corporate expense policy Missing or insufficient documentation (when policy requires receipts) Out-of-policy expenses limits without exception approvalDuplicate claims for the same expense Claims submitted well after the allowed submission window Non-business upgrades or add-ons (unless explicitly approved) Expenses already reimbursed or paid directly by the company Common Types of Expense Claims in Indian Businesses Expense claims usually fall into predictable categories but the documentation and policy controls required can vary significantly by type. A well defined categorisation helps finance teams standardize review checks, apply the right approval rules, and maintain consistent accounting records.
Expense type
Common examples
Typical policy limits
Documentation required
Practical finance considerations
Travel expenses
Flights, trains, hotels, taxis, airport transfers
Per trip, per day, or class-based caps
Ticket invoice, hotel bill PDF, proof of payment
Multiple receipts across platforms, late submissions after travel, missing invoices
Food and meal expenses
Travel meals, internal team meals, client meals
Per meal or per day cap
Itemised bill, purpose, attendee details for client meals
Frequent policy confusion between personal and business meals
Mileage and vehicle expenses
Personal vehicle used for business travel
Fixed ₹ per km rate
Trip date, route, distance travelled, approval
No formal receipts, manual distance calculation, audit issues due to lack of bill PDFs
Office supplies and equipment
Stationery, peripherals, urgent work purchases
Category-based or transaction cap
Invoice or bill PDF, proof of payment
Handwritten bills, mixed personal and business items
Communication expenses
Mobile bills, internet reimbursement, data charges
Monthly or plan-based cap
Telecom invoice, payment proof
Partial business usage, recurring claims without policy mapping
Client entertainment expenses
Client meals, hospitality, approved events
Lower frequency, higher approval thresholds
Itemised bill, business purpose, attendee list, approvals
Higher scrutiny, delays due to incomplete context
Professional development
Courses, certifications, workshops, learning tools
Annual or role-based cap
Invoice, proof of payment, approval reference
Business relevance and approval trail often unclear
Foreign currency expenses
SaaS subscriptions, overseas travel, conference fees
As per approval or category cap
Original invoice, currency details, INR conversion, payment proof
Currency conversion gaps, screenshots instead of invoices
How Does The Expense Claim Process Work? A good expense claim process is like a well-run relay race. Each step has a clear owner, the handoffs are clean, and nothing gets stuck in someone’s inbox for days. For finance teams, the goal is simple: reimburse employees on time while keeping approvals, documentation, and accounting fully defensible.
Step 1: Expense Incurrence It starts when an employee incurs a business expense while doing company work, such as travel, client meetings, or operational purchases.
The first control is policy clarity. The expense should fall under categories approved in the corporate expense policy, and within permitted limits.
Step 2: Receipt Collection and Documentation This is where the claim becomes “reviewable.”
Employees typically need to upload:
Invoice or bill PDF (where available) Proof of payment (UPI, card slip, bank confirmation, transaction reference) Basic context (purpose, client/project, attendees if relevant) In many companies, this step breaks down because receipts are scattered across WhatsApp, email, paper slips, and booking platforms.
When uploads are difficult, employees switch to manual entry , typing amounts and vendor details into spreadsheets or forms. That makes finance review harder because missing fields, incorrect values, and mismatched proofs become more common.
Step 3: Expense Report Preparation Once receipts and details are in place, employees compile them into an expense report for submission.
In Indian tools and accounting practices, reports are commonly structured as:
Trip-based reports (one report per travel instance) Month-based reports (submitted monthly for closure discipline) Client or project-based reports (mapped to cost centres and budgets) Department-based grouping (sales travel, operations spends, leadership travel) Category-based grouping (travel, meals, communication) These structures work because they match how finance teams review spends, post entries in the books, and prepare documentation for audits.
Step 4: Manager Review and Approval Managers validate whether:
The spend is business-related The claim is within policy limits The purpose and context are clear Approvals slow down when managers see only amounts, without receipts or report context.
Step 5: Finance Team Review Finance checks for:
Policy compliance and required documentation Duplicate claims or unusual patterns Correct accounting categorisation GST invoice validation for ITC eligibility (where applicable) TDS review based on the nature of the expense and internal policyThis is also where missing bill PDFs and unclear notes create avoidable back-and-forth.
Step 6: Reimbursement Processing After approvals, the reimbursement is processed through the organisation’s payout method. Finance teams also ensure the payment is properly tracked for settlement and reporting.
Step 7: Accounting Sync and Recordkeeping Finally, the reimbursement is recorded in the books and stored with:
Receipts Approval trail Payment reference This keeps the process audit-ready and reduces month-end clean-up work.
Common Problems in Managing Expense Claims Expense claims usually break for one reason: the process was built for “a few claims a month,” but the business now runs on “dozens every week.” Once volumes rise, small gaps turn into recurring rework.
For Employees 1. Cumbersome submission process Employees often have to hunt for receipts, fill templates, and remember policy rules mid-submission, manual entry of amounts, no mobile support, etc.
Example: A sales rep submits eight expenses after a business trip and spends more time formatting the sheet than writing the trip summary
2. Lost receipts or cash spends with no formal proof Cash expenses may not come with clean bill PDFs, which makes claims harder to validate later.
Example: Parking, tolls, or local autos with only a small slip or no receipt
3. Delayed reimbursements Delays happen when claims bounce back for missing details or approvals.
Example: A meal claim is submitted without purpose or attendees, so it gets paused at manager review
4. Confusion about policy Employees often know the category but not the rule.
Example: “Is this a client meal or a team meal, and which limit applies?”
5. Foreign currency expenses International SaaS subscriptions and travel receipts create conversion and documentation gaps.
Example: A USD subscription screenshot is submitted without the invoice or payment proof
For Finance Teams 1. Manual data entry and verification Finance teams re-check amounts, categories, dates, and receipts line by line, integrations are not available to auto-forward emails, slack or with HRMS tools.
2. Frequent back-and-forth Most delays are clarification loops, not rejection.
Example: “Please share the full bill PDF and proof of payment, not a cropped image”
3. Duplicate claims and fraud risk Duplicates slip in when status tracking is unclear.
Example: Same taxi receipt submitted twice across two months
4. Policy compliance issues (TDS, GST, RCM) This is where reimbursements become accounting-heavy. Finance teams face audit and accounting complexity when TDS is calculated but handled manually, GST invoices are missing or incomplete, or RCM checks require additional review and documentation.
For the Organization 1. Slow approvals Approvals stall when managers do not have enough context to approve quickly.
2. Low visibility Finance cannot easily answer what is pending, stuck, or already reimbursed.
3. Audit readiness gaps Receipts, approvals, and payment proof live in different places, so audits become a “search and match” exercise.
How Finance Teams Are Streamlining Expense Claims Once expense claims reach a certain volume, improving the process is not about “moving faster.” It is about bringing employee reimbursements into the same controlled Accounts Payable (AP) workflows used for vendor payments, so approvals, payouts, accounting, and audit trails follow one consistent system of record.
This shift helps finance teams reduce rework, standardise controls, and ensure every reimbursement can be approved, paid, and accounted for with defensible documentation.
1) Reduce manual entry at the source Manual entry is one of the biggest reasons expense claims become inconsistent. When employees type vendor names, dates, categories, and amounts manually, the chances of mismatches and missing fields increase.
With AI-based scanning
2) Reduce tool sprawl through seamless integrations Expense claim processing often touches multiple systems, such as HR platforms, accounting tools, and internal approval workflows.
With seamless integrations
3) Standardise expense reporting using tagging and structured grouping Expense claims are easier to approve and account for when they are organised with consistent structure.
Modern workflows use expense report tagging
Trip Client Project Department Event This helps managers review claims with context and helps finance teams map entries correctly for accounting and reporting.
4) Speed up approvals without losing control High-volume expense cycles often slow down because approvals require too many individual actions.
Finance teams streamline this by enabling:
Bulk approvals for managers handling recurring claim volumesBulk submission for employees who file claims periodically (weekly or monthly)This reduces approval backlog while keeping the approval trail intact.
5) Build tax and compliance checks into the review workflow For Indian businesses, expense claims are not only operational. They have compliance implications.
A structured workflow makes it easier to handle:
Tax considerations , including GST documentation checks and TDS-related review where applicableConsistent categorisation and documentation standards that support audit readiness The key is to ensure these checks happen during finance review, not as a clean-up exercise at month-end.
7) Keep accounting accurate without additional reconciliation work Expense claims become costly when finance teams have to manually pass entries, reconcile reimbursements separately, and fix mismatches later.
Teams streamline this by using automated accounting
8) Move from reimbursements to payouts in the same flow In many organisations, approvals and payments are handled in different places, which increases delays and creates spend visibility gaps.
With integrated banking
9) Keep everyone informed with timely notifications A major reason expense claims get delayed is simple: people do not know it is their turn to act.
Modern workflows include notifications for all stakeholders
Employee (submission confirmation, status updates) Approver (pending approvals with context) Finance team (claims ready for review, exceptions flagged) Admins (visibility into bottlenecks and pending actions) This reduces follow-ups and keeps the workflow moving predictably.
10) Improve decision-making with consolidated expense analytics Beyond processing claims, finance teams need visibility into spending patterns to improve policies and controls.
With consolidated expense analytics
Claim volumes by department or category Average approval and reimbursement timelines Common rejection reasons High-frequency expense types and policy exceptions This turns reimbursements into a measurable workflow, not an operational blind spot.
Bringing It All Together with Mysa As expense claims grow in volume, finance teams are better served when reimbursements are handled as a structured reimbursements workflow within Accounts Payable, not as a standalone activity. Reducing manual entry, keeping approvals contextual, accounting automated, and payments connected helps teams maintain control without slowing down reimbursements.
Mysa supports this by bringing expense claims, approvals, tax checks, payments, and accounting together in one unified AP flow, with clear visibility and audit-ready records throughout.
With Mysa’s SmartScan, invoices are scanned and there is no need to manually enter any amounts or dates. It also flags the invoices for duplicates, previous month invoices, tobacco or alcohol if detected in the receipt, etc. This means the finance team reviews prefilled fields and quickly approves or rejects any expense with full context. GST, TDS, TDS Gross up for foreign subscriptions, all taxes are calculated automatically. The team can create payments, authorise and reconcile all from the same dashboard.
Book a demo with Mysa to understand how finance teams streamline expense claims as part of a unified AP workflow.
Frequently Asked Questions 1) What is an expense claim? An expense claim is a request submitted by an employee to get reimbursed for a business expense they paid personally while performing work-related duties. It typically includes the expense details, supporting documents (like receipts or invoices), and the required approval trail so the reimbursement can be processed and recorded correctly.
2) What types of expenses can employees claim? Employees can usually claim expenses that are explicitly permitted in the company’s corporate expense policy, such as travel, meals, local conveyance, mileage , communication costs, office supplies, client entertainment, and professional development. The exact eligibility depends on category definitions, policy limits, and approval requirements set by the organisation.
3) What is the difference between expense claim and allowance? An expense claim reimburses an employee for actual business expenses incurred and typically requires supporting documentation like receipts and proof of payment. An allowance is a fixed amount provided to cover expected costs and may or may not require receipts depending on the company’s policy, category, and internal controls.
4) What documents are required for expense claims? Most expense claims require a receipt or invoice, proof of payment (UPI, card slip, or transaction reference), and enough context to explain the business purpose of the spend. For certain categories, companies may also require attendee details, travel documents, or approval references to ensure policy compliance and audit readiness.
5) How long does expense reimbursement take? Reimbursement timelines vary based on the company’s policy and approval workflow, but delays are commonly caused by missing receipts, unclear context, or pending manager approvals. A structured reimbursements workflow within AP usually helps reduce turnaround time by keeping submissions complete, approvals traceable, and finance review more predictable.
6) Can employees submit claims on behalf of others? Yes, many organisations allow employees such as executive assistants, team leads, or admins to submit claims on behalf of others, especially for leadership travel, shared team expenses, or centrally managed subscriptions. In such cases, it is important that the claim clearly shows who incurred the expense, who will be reimbursed, and who approved it.
7) What happens if an expense claim is rejected? If an expense claim is rejected, it is typically because it does not meet policy requirements, lacks documentation, exceeds limits without approval, or has insufficient business justification. Employees may be asked to resubmit with corrected details, attach missing proof, or provide additional context for review.
8) How can finance teams prevent expense claim fraud? Finance teams can reduce fraud risk by enforcing policy-based controls, requiring complete documentation, maintaining clear approval trails, and checking for duplicates or unusual patterns during finance review. Consistent categorisation, audit-ready recordkeeping, and structured workflows also help ensure reimbursements remain accurate, traceable, and defensible.
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