Setting clear guidelines is important in every aspect of business, particularly with your most valued audience – your employees. Managing T&E expenses is no exception. And, with an average of 10% of a company's business budget devoted to T&E, this isn't an expense you can afford to overlook.
Get started now with our free expense policy template
A formal expense policy provides employees with knowledge of what they can and cannot submit as a reimbursable expense, while providing management with critical real-time visibility into budgets. Having this protocol in writing will cut down on expense report fraud, which is often unintentional, but can have big consequences. According to a 2016 report by Oversight Systems, 20% of employees claimed at least one noncompliant purchase per expense report, and 10% had at least one duplicate expense averaging more than $50.
Where do you start?
Creating an expense policy from scratch can be overwhelming but there are expense policy templates available to help get you started. You can download our expense policy template, which describes the structure of a best-practice expenses policy, and explains what each section should cover.
Consider the following when you start writing (or revising) your policy.
1. Ditch the jargon: Write the policy to cover the basics, but don’t be afraid to revise it later. Make sure it’s easy to read and not bogged down by jargon. The easier a policy is to understand, the easier it is for your employees to follow.
2. Keep it fair and sensible: Write your policy to guide behavior, but be flexible enough to adapt to local and international requirements— such as higher hotel costs in more expensive cities.
3. Invite participation: Before you implement the policy, ask team members to participate in the process. For example, if they help develop the expenses policy they’ll see why it’s necessary and will be more likely to adhere to the rules, encouraging others to do the same.
4. Make it easy to find and easy to use: Your policy won’t be followed unless people know about it. Make sure yours is visible and easy to find.
Emphasize the positives and lead by example
Hold a training to explain your expense policy’s benefits and purpose. Familiarizing managers who approve expenses with the content, the importance of compliance, and the reasons for implementing the policy can help them confidently enforce the rules.
Consider helpful software tools and leverage existing technology
An automated solution that automatically populates charges from suppliers, credit card companies and receipts will save time and allow you to focus on your core business. Choose a solution that works with mobile devices and allows for the submission and approval of photographed receipts no matter where you or your employees are.
Ready for more insight? Read the report to see how SMBs drive growth and innovation when they embrace the full power of T&E solutions.