A company’s culture is often as easy to detect as its dress code. And just as the company dress code is designed to fit your company’s culture, your travel and expense policy should also be geared to fit that attitude.
Providing your employees with a well-written and clear expense policy makes it easy to understand and helps prevent confusion, frustration, mistakes and best of all—fraud. When you’re creating your policy, think about the tone of the policy as well as the actual rules. Experiment with a few ideas. Try lighter phrasing, such as “travel guidelines” vs. “travel policy.” It’ll make a difference.
You might also consider phasing in your new policy. This can often be easier than trying to prompt tighter control on a staff that’s used to a looser environment. For example, you could start by just warning a specific person in your company about out-of-policy purchases and later moving to manager approval for out-of-policy trips.
As the purpose of an expense policy is to provide guidance and take the guesswork out of filing out an expense report, work with your employees about what makes sense to them, too. Remain as flexible as you can and listen to feedback.
If you’re just starting to work on a corporate policy, or have one well in-hand, here are some tips and suggestions to either get you started or help you stay up-to-date:
- Divide up your policy into sections: air travel, hotel lodging, dining, entertainment expenses, car rental.
- Provide a section for your employees that clearly states what is not reimbursable.
- Let employees know what enforcement measures will be taken to ensure policy compliance.
- Include a guideline around traveling with spouses or significant others. What if an employee chooses to stay over extra days? Or over a weekend?
- Who is responsible for travel charges if the employee cancels a reservation or is a “no show”?
- What is your policy about home offices? Can employees be reimbursed for internet and/or phone charges? What about office supplies or office furniture?
- What’s your company’s policy about consuming alcohol at meals with clients? If alcohol is permitted, what is your policy about paying for an alternative ride back home or to a hotel if the employee can’t drive?
- If a receipt is missing, let employees know all is not lost. Ask for an explanation of the expense, business need, date of the expense, vendor, location, and dollar amount. You might also consider calling the vendor for a duplicate receipt if possible.
- Update your mileage reimbursement rate. Should employees start the mileage count from your company’s headquarters? Or from home? (IRS rate is 51 cents per mile as of January 2011.)
- Are credit card statements an acceptable form of receipt? Or do you require itemization and a store receipt along with a credit card slip?
- Also, be sure to fit the current mode of your company growth. Are you in growth mode or cost-cutting mode? Are you a smaller company or larger? How high in the management structure do expenses need to be approved?
One last thing to consider: think of your corporate expense policy as a working document, one that requires revisions and updates. If you notice that employees ask the same kinds of questions, take it as a good sign that not only are employees trying to do what’s best for the company, but that it might also be a good time to update your policy to include the answer.
Expense and travel policies are as individual as the multitude of companies out there. As you’re creating your company’s policy, doing your research and thinking about your culture will mean a much more successful policy in the long run. By providing your employees with an easy to understand, organized and well-written corporate expense policy, you’ll be arming your company with one of the best fraud preventative measures out there: information.