A well-defined expense policy can save time and money and protect against fraud and compliance breaches. Expense policy outlines business related expenses and tells you what can and cannot be claimed in business travel.
Not everyone in the company will go with same rules; as an expense manager you have to make your employees understand the rules, help them figure out gray areas, and hear their inputs while making policies.
Update policy on a regular basis
Expense policy is not a one-time update, it should be continuously updated as per the changes in legislation, business environment, and advances in technology. Employees should view changes on a regular basis to know about the latest enhancements made to the policy.
Automating compliance can integrate expenses into your day-to-day life by setting limits, flagging specific areas, tracking travel accuracy and enabling real-time confirmation to make sure users are aware of tax and other obligations while making claims. This way companies can ensure accuracy and save a significant amount of time & money. Moreover, users can lodge digital receipts from their smart phones, giving finance teams the visibility they need over spending.
Disputes may arise in travel, accommodation and hospitality, hence guidelines around them must be clear stated. For the most part, managers will submit out of policy expense claims, so you have to approve/reject expenses without any bias. Ensuring fairness at every level of the expense approval is the best practice.
Conducting audits on a regular basis is one of the most effective ways to avoid abuse. Spending patterns will automatically get reflected when you conduct audits. Calculate averages and deviations to figure out where the hotspots are. If people know they are being watched, they are less likely to commit fraud.
Submit & approve expenses on time
Approving and paying expenses on time is the best way to avoid cash flow issues and accounting nightmares. Also, employees should be warned against delays in filing expenses.
Just keep these tips in mind while outlining your T & E expense policy. Expense report software helps you greatly with policy-making and enforcement.