Whether you already have a company expense policy in place or are looking to create one, always keep in mind that expense policy does not only control your costs but it is also a reflection of the company culture. Having a poor expense policy can affect both your company’s cash flow and your employee’s well being and happiness.
An expense policy should be well-written, fair for everyone and easy to understand for all employees. It should help to prevent frustration, confusion, mistakes and most importantly—fraud. You should also make sure that your policies are up to date with the latest guidance from HMRC and don’t fall foul of gifting rules.
Here are some tips and suggestions to either get you started or help you.
There are three main categories of expenses to set policies on:
- Expenses that are paid directly by your company.
- Expenses that are paid by your employees and how to reimburse them.
- Mileage claims for travel made for company business.
- First of all, start with the travel expenses since they are a big part of overall expenses and should be carefully written. Divide up your policy into sections for travel expenses such as transportation, accommodation, food expenses, entertainment and other work-related miscellaneous expenses to start with.
- Then provide a policy section for your employees, which clearly states what is not reimbursable. Clearly mention what are work-related expenses and how they can claim business expenses back.
- Additionally, every business wants to cut overspending and try to reduce unnecessary costs. If your business has business deals with certain hotels, airlines or other businesses for better rates, mention it clearly in the expense policy guidelines.
- After setting policies for each category, don’t forget to explain the procedure of how to document the expenses and guidelines for the claim back process.
- Let employees know what enforcement measures will be taken to ensure policy compliance.
A simple guide of how you can structure your expense policy:
- An introduction
- Employees’ and managers’ responsibilities
- Fraud, bribery & corruption
- Suggested costs for expenses that would normally be reimbursed (including subsistence, hotels, mobile phone and internet connectivity; air, rail, taxi and road travel; mileage; guidelines about entertainment and overseas expenses)
- Procedures for documentation and guidelines for claim back process
In addition to the expense policy, we understand that the spending limit for each employee might not be the same. With Expend Flex Card, you can set a spending policy for each employee. In this way, you can reduce expense fraud and control overall spending.
Learn how you can stress-free expense management complete all in one place here