What Is a T&E Card and How Does It Work?

Travel and entertainment (T&E) cards are specialized financial tools for managing business travel and related expenses. They provide a structured approach to employee spending, facilitating transactions for work-related activities and helping organizations maintain oversight of expenditures. T&E cards simplify financial management.

Defining T&E Cards and Their Core Purpose

A T&E card is a corporate credit card issued to employees for business-related travel and entertainment expenses. Unlike general corporate cards, T&E cards are tailored for expenditures such as airfare, hotel stays, business meals, ground transportation, and conference fees. They allow employees to make purchases without using personal funds, eliminating out-of-pocket spending and subsequent reimbursement processes.

T&E cards streamline and control employee spending, providing businesses with visibility into significant operational costs. Companies use these cards for better oversight, ensuring expenses align with budget and company policies.

This approach helps in centralizing expense management, moving away from manual tracking and reducing the potential for errors. By providing a dedicated payment method, T&E cards contribute to greater financial transparency and assist in managing a substantial portion of a company’s budget.

Key Features and Operational Mechanics of T&E Cards

Integrated expense reporting is a core feature, which automates the tracking and categorization of expenditures. This automation reduces manual data entry and helps ensure accurate financial records. Real-time spending tracking allows finance teams to monitor transactions as they occur, providing immediate insight into current spending against budgets.

Customizable spending limits are another significant feature, enabling businesses to set specific thresholds based on employee roles or expense categories. This control helps prevent overspending and ensures adherence to predefined policies.

Many T&E card systems integrate with existing accounting software or enterprise resource planning (ERP) systems, which streamlines the reconciliation process and enhances data accuracy. Furthermore, these cards often include enhanced security features, such as fraud monitoring and the ability to generate virtual card numbers for secure online transactions.

Establishing and Managing a T&E Card Program

Implementing a T&E card program requires clear policies and procedures to ensure effective management and compliance. Businesses typically define a corporate card policy outlining acceptable expenses, spending limits for different categories, and requirements for documentation. This policy also specifies the process for issuing cards to eligible employees and provides guidelines for their use.

Employees must submit detailed records for tax substantiation. The Internal Revenue Service (IRS) mandates that taxpayers maintain evidence of the amount, time, place, and business purpose for certain expenses, including travel and meals. Receipts are typically required for expenses of $75 or more. Business meals are generally 50% deductible in 2025, provided they are not lavish and have a clear business purpose, while entertainment expenses are usually not deductible.

The management workflow includes reviewing and approving expenses, followed by reconciliation against company financial records. This often involves integrating the card program with expense management software that automates reporting and facilitates auditing. Regular monitoring identifies policy violations or unusual activity. Continuous training for employees on policy adherence and proper documentation supports the program’s success.