Travel Expense Policy
PURPOSE
The purpose of this travel expense policy is to outline the process for Kotn-related business travel, explain what expenses will be reimbursed and how, as well as provide information on how employees can report and claim expenses following actual spend.
This policy is designed to rely on the goodwill and discretion of every Kotn employee.
SCOPE
This policy applies to all Kotn Head Office employees that need to personally incur expenses while travelling for approved business activities. In general, travel expenses may fall under two categories: (A) expenses that are paid directly by Kotn on behalf of employees; or (B) expenses that are paid by the employee and are reimbursable. This policy applies to travel expenses that fall under category B, but does not apply to travel expenses that fall under category A.
This policy does not apply to other forms of reimbursable expenses that may be incurred on behalf of Kotn, outside of travel, such as the purchase of supplies on behalf of the company.
This policy does not apply to the travel activities of the Egypt-based team, for example for a visit to a manufacturing facility.
This policy does not apply to the travel activities of the Retail-team when visiting local markets, for example, store visits to Ossington when Toronto based.
DEFINITIONS
Necessary:
Minimum purchase or service required to achieve a particular business objective.
Proper documentation:
Invoice or receipt outlining the details and total cost of the expense, the date the transaction took place, the company the payment was made to, and the HST number.
Reasonable:
An ordinary expense that reflects a practical decision to incur the cost on behalf of Kotn. What is “reasonable” will depend on the type of expense and where it is being incurred, but a general rule of thumb is the ‘bulletin board test’ – if the expense were to be posted on a company bulletin board, would your colleagues and peers agree that indeed, that cost is fair and appropriate. “Reasonable” may refer to a standard meal (i.e. a main and a small appetizer or dessert) at a regular (non-luxury) dining establishment.
Travel Expenses:
Expenses incurred by the Employee on behalf of Kotn while travelling for work. Examples of travel expenses which are eligible for reimbursement include but are not necessarily limited to: accommodation (e.g. hotels or short-term rentals); travel transportation costs such as flights, taxis, car share services, rental cars, trains, buses, tolls, and parking; individual meals including gratuity; telecommunication charges (e.g. the cost to purchase a local SIM card, or a roaming package, or reasonable long-distance expenses); meals and entertainment cost incurred for business development; flight cancellation insurance; seat reservation charges; mileage; laundry services (reasonable costs where the trip is in excess of 10 business days), dependent care (reimbursement of this expense is determined on a case-by-case basis). If you are not sure that an expense is acceptable, please the People Operations Team.
POLICY ELEMENTS
The guiding principle of this policy is that employees should neither gain nor lose personal funds because of Kotn-related travel.
Kotn will reimburse out-of-pocket business travel and related expenses that are legitimate, reasonable, appropriate, and approved for the business activity undertaken. All travelers are expected to exercise sound business judgement when incurring or approving reimbursable expenses and will not profit financially from these expenses. Travelers are in positions of trust and, as such, all expenses should be reasonable.
Before the employee engages in any Kotn-related travel, tentative travel costs should be discussed between the supervisor/manager and the employee. This ensures a clear understanding between the traveler and management of what is reasonable and allowable for their travel. Approval should be by email or in written form by your supervisor or manager. Kotn is not obliged to reimburse expenses for travel which have not received approval.
Original receipts, as well as proof of payment or usage must support all expense reimbursement claim items. Where original receipts are not available, for example due to shared funding arrangements, loss of receipt, or where a receipt has not been provided by the vendor, a clear explanation of the exact or approximate costs, as well as a description of the expense should accompany the request for reimbursement.
All expense claims should be submitted for reimbursement on a timely basis, preferably within one week of the expense having been incurred.
The expense being requested for reimbursement must have been personally incurred by the employee/claimant. In other words, one employee is not allowed to request reimbursement for an expense that was paid by another employee.
Air & Rail Travel
Travel should be planned in advance to take advantage of early booking savings and employees are encouraged to request the lowest available fare at time of booking. It is important to note that the lowest available fare may have restrictions such as being non-transferable or non-refundable.
The cost of train travel will be reimbursed if it is the most economical and direct route possible, and the cost does not exceed that of the lowest available airfare. Reimbursement can only be claimed for out-of-pocket expenses and not for tickets purchased with frequent flyer points. For domestic and international travel, the standard class of service is the least expensive economy class fare. All other business class and premium economy travel may be permitted (e.g., flights or train travel more than 6 hours, or for medical reasons) if pre-authorized by the CEO
Accommodation
The standard for accommodation is a single room with a private bath in a business class hotel. Use of luxury accommodation is not reimbursable.
It is the responsibility of the Kotn employee to pay for any hotel cleaning charges that are a result of violating hotel policies.
Transportation
Employees are advised to use the most practical form of transportation. Public transportation, taxis, and ride share services are considered to be the most reasonable. Rental cars should be limited to cases only when necessary or when multiple trips within a location are required. Where a rental car is used, the standard is a mid-size car and the lowest available rate at the time of booking, however an upgrade to full size is available should circumstances warrant (e.g. more than 4 passengers, transporting equipment, etc.). The circumstances must be documented on the expense claim, and pre-approved where possible. Rental insurance should be purchased. For group travel where a vehicle rental is the most economical means of travel, one vehicle should be rented for four travelers. Charges for bridge, ferry, highway tolls and parking costs can also be expensed with receipts. If work is extended past the hour of 8:00 pm in the traveler’s location, a rideshare app such as Uber or Lyft should be used. Traffic violations (speeding tickets, parking tickets, etc.) are the sole responsibility of the individual and will not be reimbursed by Kotn.
If an employee would prefer to use a personal automobile while on a Kotn business trip. The following circumstances are reimbursable:
Trips from home to business meetings may be claimed if the claimant has typically no business reason to drive to work, the claimant attends multiple off site business meetings in one day, or the distance materially exceeds the claimant's everyday commute.
Normal trips to and from the office are not reimbursable.
All traffic and parking violations are the employee's responsibility.
The employee will be reimbursed at the current Canada Revenue Agency’s mileage reimbursement rate multiplied by the number of kilometers driven. The mileage rate covers all operating costs, including fuel and a contribution to depreciation.
Screenshot of Google maps outlining the kilometers driven, and the purpose of the trip should be uploaded to the Accounts Payable Submission form for reimbursement. Details regarding reimbursement can be found in section 11 of this document.
Meals & Entertainment
Meals:
Individual meal costs, including gratuity, may be claimed for reimbursement on a Kotn-business related trip. While on official business travel, employees are entitled to 3 standard meals a day at a regular, non-luxury dining establishment. Only reasonable food and alcohol consumption is reimbursable.
Employees will be reimbursed for business-related meals when dining with other employees on a business trip. In such cases, the most senior employee attending should pay for the meal. The names of the individuals or the group in attendance must be indicated on the claim. Detailed receipts for the meals are required in addition to a credit card slip.
Entertainment:
Given that hospitality extended to stakeholders may be required during travel, reasonable and necessary entertainment costs are acceptable. These costs should only be incurred by individuals working in sales, or by Senior Manager level or higher, and must be of benefit to Kotn. Business entertainment includes meals, flowers, gifts, etc. Entertainment also includes the taxes, tips and cover charges which are included in the cost of the business entertainment. Business related meals may include alcoholic beverages. If alcohol is provided, moderate consumption and price point is the standard. There must be clear documentation as to the business purpose of the hospitality (e.g. taking out a potential customer for a meal, or meeting with a potential supplier), noting the names of the individuals, or the group involved.
NON-REIMBURSABLE ITEMS
The following items are not currently permitted for reimbursement: transportation fines (parking tickets, speeding or others); partner travel expenses; service or late payment or any other charges on personal credit cards; personal entertainment expenses (including movies, books, sightseeing trips, etc.); travel stopovers for personal purposes; items stolen or lost in transit; club membership fees for personal recreation or socializing.
ADVANCES
Employees are permitted to receive, upon their request, an advance for their upcoming business travel. The employee is required to submit a travel plan and budget to their manager for review and must receive approval in writing. Upon approval, the employee is required to submit a request for travel advance using the AP Form (see appendix) including the support for the approved amount and their manager’s sign-off. The employee will receive the advance via electronic funds transfer before they commence travel. The employee must retain all receipts as per usual when traveling and must submit those receipts to the AP Form as per the usual travel policy at their earliest convenience. These submissions will be offset against the funds already released. Any funds issued in advance that are not supported by receipts within 30 days of the employee having completed their travel will be asked to be repaid to Kotn by the employee. Any balance the employee has paid over and above the advance will be reimbursed to the employee.
CLAIMING EXPENSES
Expense reimbursement claims are to be submitted to the Accounts Payable Submission Form (see appendix), preferably within one week of the travel expense having been incurred or the travel concluding, whichever is earliest. Timely reporting is very important to ensure that charges are accounted for, and that financial reporting is accurate. Also, the sooner the employee submits their reimbursement request, the sooner they will be repaid.
Electronic copies (e.g., photos, scans, PDFs) of original receipts issued by service providers must support requests for reimbursement. For online purchases using a personal credit card, the supporting documents should include the confirmation of purchase provided by the website after payment.
If paid through a method other than a personal credit card, for example with cash, expenses should be submitted in the currency they were paid. If an expense in a currency other than CAD has been incurred on an employee’s personal credit card, the expense should be submitted along with proof of the visa settlement balance to support the amount to be repaid to the employee (CAD) versus the original receipt (in non-CAD currency). The AP submission form will assist in this process.
Once the claim has been completed by the employee, it is submitted through the AP Submission Form to the employee’s direct supervisor/ manager. Prior to approving the expense, supervisors are required to review employee expense reports for compliance with these policies and guidelines, obtain assurance that expenses claimed are eligible and that receipts / proof of payment comply with requirements set out above.
Following approval by the employee’s manager, and a review of the claim by the Finance team, the employee will receive payment via electronic funds payment at the earliest available payment processing date. Note that this may take several days. If funds reimbursement is required on an urgent or expedited basis, the employee is asked to mark their expense submission as “Urgent” on the submission form, and may also contact AP@kotn.com to communicate this requirement.
APPENDIX
North America Team: Accounts Payable Submission Form
