Understanding What Your Expense Policy Should Address
When you’re creating or revamping an expense policy, it’s important to design a flexible policy that is not only easy to implement, but also one that makes your team happy, improves productivity, and achieves compliance —while also saving the company money.
We recommend that your policy takes into consideration expense reports and documentation, the approval process, and reimbursements. It is also advised to build-out a section detailing what can be expensed and related details such as maximum reimbursement amounts or monthly allocations for certain categories.
Expense Reporting and Documentation
Automated expense tracking, makes it easier for employees to capture receipts on-the-go, increasing compliance, so you see all of their expenses sooner. In your policy, be sure to cover if all line items require or receipt, or if only purchases over a certain dollar amount need documentation. You should also specify expense report due dates —within 90 days of an expense or monthly, as an example.
With a business expense app, policies related to expense reports and required documentation are wrapped-in. For instance, if a receipt is missing, the employee will be prompted to attach it prior to submitting the report. Employees are also able to snap photos of receipts from within the app, making the entire process less cumbersome.
From an approval perspective, make sure that your process is structured in the right way that fits you and your employees. Strict approvals will increase employee frustrations and make compliance attainment more difficult. Overly relaxed policies will likely lead to increased out-of-policy spending and missed deadlines.
From an approval perspective, expense management software lessens the burden on people managers and saves time as they will know receipts and billing codes will be in the report. If employees are still using spreadsheets and email to communicate expense report approvals, odds are there will be missing or overlooked information and time wasted in the email shuffle. Process automation is key.
Reimbursements are extremely important for your employees, as people like to get their money back as soon as humanly possible.
Make sure your policy outlines the reimbursement process and turnaround times. Also, highlight if reimbursements will be in the form of a paper check or sent via direct deposit. If you have automated processes via expense management technology, employees will be thrilled that reimbursements can be processed and direct deposited in as little as 24-hours.