The Need For Effective Corporate T & E Policy
A well-defined expense policy can save resource time, while protecting against fraud and compliance breaches. An expense policy should outline how to handle business expenses, guide employees what can and cannot be claimed, and clearly state what happens if employees make out-of-policy expense claims.
Not understanding expense policies is one concern that employees often face. Employees have to know the policies to spend the company’s money effectively. Problems may arise from the level of accountability that is associated with employee spending habits. What these organizations are lacking is an effective expense policy.
Transparency
An unfair expense policy can lead to fraudulent claims. Not every employee is okay with the rules and limits, so allowing employees to share inputs on the policy can help them understand the rules, and figure out grey areas.
Keep Your Expense Policy Simple
Claiming legitimate expenses can only happen when policies are clear and understandable. The expense process hinges on an unambiguous policy. Too much complexity can be frustrating, resulting in compliance breaches or exaggerated claims. Communicate the issues in a tone appropriate to your organization, and make the policy readily accessible to employees.
Review the Expense Policy
It is not that if created once, your job is done. You have to regularly update the expense policy to reflect changes in the business environment, such as inflation and technological advancements.
Automate Compliance
Many businesses work with paper when processing expense reports, which increases costs. Organizations can save time and money by automating procedures; and our cloud-based expense report software solution can simplify reimbursement procedures, implement policy guidelines, and communicate policy changes to employees. Tools such as the expense report software embed your policy into the processes and help you to set spending limits, flag suspicious areas, use GPS to track travel, and other tax obligations while making expense claims. Moreover, claimants can capture digital receipts from their smartphone, giving the finance department visibility over spending.
Handle Expenses without Bias
Expense approval should happen without bias, no matter who is submitting those. Generally, managers are more likely to submit ‘out-of-policy’ expense claims, but not all of them are rejected. The hierarchy will influence the expense approval rate.
Expense Audits
Informing employees that you are going to conduct regular reviews through audits is the most effective way to avoid abuse. Spending patterns is what should be monetized regularly to determine where the hot spots are. If people know they are being watched straight away, it is less likely to offend.
Approve and Pay Expenses on Time
No matter whether employees pay out of their own pocket or from a corporate card, reimbursements should be done in a specified time frame. If not, this would create serious cash flow issues and accounting nightmares.
