Whilst Expense Management is a top priority in growing companies, Travel Expense can be an equally important but often overlooked element.
As your company evolves, so do your employees and their spending habits.
A travel expense policy offers a spending guideline and defines how organisations reimburse employees for reasonable expenses incurred on behalf of them. It ensures security for the business by keeping employees in check and ensures they understand what qualifies as a business expense.
Travel expense policies should be regularly updated to reflect realistic spend and to avoid confusion and resentment from your employees and accounts team.
How do you know it is time to update your travel expense policies?
There are a few key indicators that you should look to review your travel expense policy:
• Clarity – unexpected expenses such as additional baggage fees can cause confusion for both the employee and the accounts team. Comprehensive definitions of the most common scenarios should be included; if there is lots of back and forth it is time to review your policies.
• Employee Resentment – out dated expense policies can lead to employee resentment. Hotel room rates are a good example, if the average room rate in a city has gone up in price by £25 a night in the previous year or two but your accommodation expenses cap does not reflect this you could end up with a disgruntled employee. An Expense policy that is not fair to employees is no good.
• Abuse of Expenses – Whilst it is integral to be fair to employees you need to be cautious of those who may take advantage when submitting their expenses. A this survey showed that a huge 85% of employees believe it is acceptable to stretch the truth with their expense claims. If you are inundated with unqualified expenses its time for a review of your old policies.
Your travel and expenses policy should be tailored to fit the bespoke requirements of your business and reviewed on a regular basis. Some key considerations and best practices to apply when creating your policy include:
• Staying up to date – Set regular review intervals to check current trends, costs and regulations.
• Utilise your resources – Who knows better what is the current situation when travelling than the people who are doing it. Involve your employees at the beginning of the process and there will be less confusion later down the line.
• Be clear but comprehensive – Don’t create a monster document but do review the most common expenses incurred and provide clarity to remove the “I wasn’t aware” excuse when it comes to claims.
• Enforcing your policy – What’s the point of an expense policy if no one follows it? Using expense automation tools such as KiSSFLOW can automatically validate expenses and identify any that do not comply with your policies.
Creating and enforcing an effective expense policy is critical for the success of any business. Utilising a workflow solution such as KiSSFLOW for SunSystems available from FinanSys.
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