Do your employees rack up massive expenses? Are you seen as unfairly harsh with your employee expense claim approval process? If so, read on to understand why you may need an employee expense policy.
Why do you need an expense policy? When you empower your employees with an expense account, you trust that they won’t blow a few thousand dollars on a suite at the Park Hyatt. But seriously, do your employees really know what’s acceptable? People usually want to do the right thing when they submit expenses, but sometimes they just don’t know what the right thing is. This is where a clear, unambiguous expense policy comes in to prevent frustration and mistakes for all.
So, where do you start? It can be a bit overwhelming to create an expense policy from scratch. To help get you started, you can download a free expense policy template here. The template describes the structure of a best-practice expenses policy and also explains what each section should cover. It even includes sample language you could use as a starting point.
Here are a few other important points to think about when you start writing (or revising) your expense policy.
Ditch the jargon: Write the policy to cover the basics, but don’t be afraid to revise it later. It probably won’t be perfect on the first attempt, so remind people to use common sense as well. Also, be sure to edit it for clarity before it’s published. Double-check to make sure it’s easy to read and not bogged down in jargon. The easier a policy is to understand, the easier it is for your employees to adhere to.
Make it fair: No-one should have to pay out of pocket if they spend sensibly. Create a policy that is generally regarded as fair, and then make it easy to find and follow.
Invite participation: Get buy-in from your employees before you implement the policy by asking 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 and encourage others to do the same.
Use sensible, localised rules: Sometimes a one-size-fits-all policy won’t work across an entire company and you need to adapt to local requirements, such as higher hotel costs in more expensive cities. One handy solution is a table of acceptable regional rates.
These are just four of 11 tips you should consider when creating an expense policy. To get the rest, download the Taking The Pain Out of Expenses policy template and top 11 tips White Paper now.
Follow @mybusinessau on Twitter for breaking stories throughout the day.
Find out why you should join the SME Association of Australia.