How Can You Get the Most Out of Your Expense Policy?

How Can You Get the Most Out of Your Expense Policy-75

An estimated 82% of employees lie or file inaccurate expense reports. While there is no way of preventing anyone from knowingly making false claims, companies can do a lot to ensure that most employees comply with the established T& E (travel and expense) policies. 

This reduction in incorrect expense claims shouldn’t be taken lightly. 

Fraud and non-compliance in employee spending claims cost companies billions of dollars every year, so even a slight uptick in policy-compliant submissions should be something you need to pursue energetically. 

Now, how do you go about this seemingly arduous task? 

It all boils down to what you do when you present your expense policy to your employees. Turns out, there are several things you can do as part of the management or the HR team to ensure that everyone understands your spending policies and adhere to them as much as possible. 

Here are a few pointers on how to go about doing just that. 

Setting an example

One of the first things companies need to do to get the most out of their expense policy is to have the senior members take it seriously. Suppose junior employees are questioned over tiny infractions, and senior team members are let off the hook. In that case, the whole system collapses, as an atmosphere of skepticism prevails regarding the expense policy. 

Prioritize transparency 

Many studies have shown that employees tend to violate the expense policy of a company frequently if they think it is unfair. To ensure that your expense policy is respected and followed, ensure that employees are informed as to why each aspect of the document exists. Further, it is vital to get their inputs while creating your company’s expense policy and keep them notified of any change you make to it. 

Simplicity and clarity are key

Make the expense policy as clear as possible. If the employee is on a trip or making a key purchase, and they are left scratching their head as to whether or not some aspect of their expense is compliant or not, they will most likely make the purchase and later on file a report that meets your policy requirements. 

Also, ensure that there is no jargon and that the policy is readily available throughout the organization. 

To ensure simplicity, include a table of contents, bolden the key points, and provide graphs, flowcharts, or photos to illustrate how to best adhere to the policy. 

It is also quite crucial to spell out every aspect of your expense policy. For instance, include:

  • Tools to be used for booking travel
  • How the reimbursements process works
  • The criteria for the approval/ rejection of travel itineraries 
  • Which sites, travel agents, or internal documents/staff are to be referred to while booking travel 
  • Food allowance details
  • Specific flight details, including rough budgets, class, and other limits 
  • Permissible hotel and car rental budget 
  • Timeframe for expense reporting and expected reimbursements 

Keep up with the times

Remember to constantly make adjustments to the expense policy to keep in tune with the present scenario and incorporate factors, such as inflation. For instance, if your salespeople have stopped taking regular cabs and switched to Ola or Uber and are traveling at a reduced price than before, make sure that that change is reflected in your policy. 

However, it is equally crucial to communicate these changes to the employees and confirm that everyone has seen the changes and is fine with them. 

Audit frequently 

If the employees know that the compliance is monitored for each individual and the department, they are less likely to be sloppy with the expense reporting. So, you must conduct regular auditing of spending in terms of the volume and the nature because it will provide you with crucial patterns of what is happening regarding expense policy compliance. 

Automated policy compliance—the most potent way to ensure responsible spending and accurate reporting 

Companies can employ cloud-based expense management software to implement a clear expense policy, simplify the reimbursement process, and seamlessly integrate policy changes into the company’s day-to-day workings. 

Companies can easily set spending limits, automatically flag inappropriate reports/ claims, leverage GPS to determine the accuracy of travel claims made by employees and make everyone aware of tax and other obligations. 

Conclusion

Following these steps while creating, maintaining, distributing, and enforcing your expense policy will go a long way in reducing fraud, misreporting, and other malpractices in your company’s expense management process. 

However, if you are ready to take your compliance to the next level with automation, ExpenseOut will be perfect for you. 

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