How to Create an Effective Business Expenses Policy (With Template)
Introduction
You may already have an expense policy or your may be an organisation just starting to realise that you need one. Either way; this guide is for you.
It provides all the basic help and information you will need to create a robust expenses policy document. It’s the foundation on which effective expense management is built.
With digital management tools allowing us to efficiently monitor and maintain an expenses policy, there’s no longer any excuse for a failure to take control.
A properly implemented policy will save your organisation valuable time and resources, as well as helping to protect against fraud and compliance breaches.
This guide provides an overview of how to create, manage, and maintain a robust expense policy.
The information contained is based on more than a decade’s worth of experience Webexpenses has acquired in helping businesses regain control of their expenses.
The guide is split into two sections: Policy overview and policy template.
How to create an effective policy
The most effective way to approach creating an expense policy is to go back to basics and ask some fundamental questions:
- What is it?
- Why is it needed?
- How to make it work?
It’s by stripping away all the detail and focusing on these key concepts that you can refocus your policy and make sure it’s doing what you need it to do.
What is it?
An expense policy is a document that outlines how your organisation handles business-related expenses. It gives employees guidance on what can and can’t be claimed for.
It provides a guide to the process of making claims, as well as what happens if there are disputes over expenses.
Why is it needed?
The primary aim is to provide a fair system of compensation for employees who incur personal expenses for business reasons. Without an effective policy, an organisation leaves itself open to spiralling costs and legal risks.
The key objectives of the policy, therefore, are to:
- Be fair and transparent
- Control costs
- Prevent fraud
- Ensure compliance
If employees view the policy as being fundamentally fair, it prevents expenses from developing into a breeding ground for low morale, discontentment, and exaggerated claims.
With a robust and fair policy in place, everyone knows where they stand. Employees may not agree, or like, aspects of the policy but they know exactly how it works, what they can expect from the company and what it expects of them.
Research suggests that implementing an effective expenses policy reduces an organisation’s transport and entertainment costs by up to 20%.
How to make it work?
It sounds obvious, but the most effective policies are those that people adhere to. It’s something that is understood, accepted, and followed. The policy also has to be effectively managed and maintained.
Download the full guide here.