Creating a policy for employee expenses

Expenses are a necessary part of business when employing a workforce, and so to avoid confusion or misinterpretation and to set and manage expectations, having an expenses policy in place is essential.

For businesses that don’t as yet have a policy in place, there are a few things worth considering:

Keep it simple – avoid complicated and jargon-esque explanations. The more simple the guidelines and rules can be, the better chance of avoiding misinterpretation of those rules. Give scenario examples where possible to contextualise the rules, which can help illustrate certain situations which may be difficult to explain or come across as ambiguous.

Gain feedback – invite input from employees so they feel like they are part of the process of decision-making on a policy that very much affects them. It certainly stops any comments about the policy being unfair if employees have had their say!

Playing fair – and on the subject of being fair, try to make the policy as all-encompassing as possible, meaning rules are rules regardless of what position or role the employee fills. This is a situation where one-size-fits all is best.

Be flexible – there will be times when a business expense may be a great deal higher than the average train ticket fee or a client lunch. Be mindful of the financial status of employees and the fact they may not either have funds to pay out for large expenses, or be willing to wait for reimbursement.

Utilise technology – whether the expenses claim process is manual or electronic, the rise in smartphone use means most employees will be able to take photographs of expenses and receipts for ease of submission and filing.

Make it an evolving document – the policy doesn’t have to be set in stone and what works for the company now may not be the case in the future, as the company grows or changes structure. Be sure to visit the policy on a continual basis to ensure it remains fit for purpose.

Spread the word – ensure all members of staff are aware of the policy; existing staff can be informed of where it is, and a meeting to discuss it can be held if necessary, to ensure everyone is clear on the rules. Ensure new starters are informed about it as part of their induction process.

An expenses policy is like any other business operations policy, but some sensitivity does need to be employed as it is a policy affecting employees directly in terms of them having to outlay funds they may not get back immediately, so it is an issue that requires careful handling.