Making the most of your company expense policy: 5 steps to best practice

Five crucial steps when setting up an employee expense policy


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A strong employee expense policy should give you enough control over where company money is being spent.

The goal of a travel and expense (T&E) policy is to establish what your employees are allowed to spend company money on, defining how much they can spend on items and activities such as meals, hotel rooms and entertaining clients.

A good company expense policy will save your company valuable time and resources, as well as help to protect against fraud and compliance breaches.

Here are a few tips on how you can implement expense policy best practices in your business.

Implementing expense policy best practices in your business

 

Step 1: Understand why you’re creating an employee expense policy

Before you jump into action and apply your company expense policy, think about why you need one.

There are a number of reasons to create a watertight T&E policy, among them:

  • Limit costs and outgoings: you should make it clear what is expected of your employees, and what they can use company cash for.
  • Foster a culture of fairness: you’re keen on making members of your team feel adequately compensated for business costs, which should prevent them from submitting exaggerated claims.
  • Prevent fraud: you can use your policy as a concrete document to protect yourself if you feel employees have overstepped the mark.

Understanding exactly why a business expense policy will give you hints of what you should include in it. Start with the spending that’s most likely to arise in the short term.

You don’t have to think of everything when you first write your expense policy and procedure – it isn’t set in stone. You can always add more later, so you can account for business and employee changes.

Step 2: Clearly explained steps and processes will save time and reduce disputes.

For instance, consider setting rules that receipts or documentation is required for all expenses above £20. Consistency will improve morale and reduce debate.

Keeping receipts is vital. No matter how trustworthy an employee is, it’s not wise to just take their word for expenses. Besides, your accounting practices will require receipts for all expenditure above a specified amount. You’ll need evidence of each employee expense, with receipts submitted to the finance team.

Our expense management solution reduces the time required to manage receipts. Employees can just snap a photo of a receipt on the Soldo app and submit them to the finance team. It’s the end of lost receipts!

Clearly explained steps and processes will save time and reduce disputes.

For instance, consider setting rules that receipts or documentation is required for all expenses above £20. Consistency will improve morale and reduce debate.

Keeping receipts is vital. No matter how trustworthy an employee is, it’s not wise to just take their word for expenses. Besides, your accounting practices will require receipts for all expenditure above a specified amount. You’ll need evidence of each employee expense, with receipts submitted to the finance team.

Our expense management solution reduces the time required to manage receipts. Employees can just snap a photo of a receipt on the Soldo app and submit them to the finance team. It’s the end of lost receipts!

Step 3: Educate employees on your T & E expense policy and expense claims

Equip your employees with a copy of your business expense policy and procedure, ensuring that this is included in induction training, and provide adequate training on expense reporting.

Emphasise that every expense submitted is a direct cost for your company and that people should spend only as and where necessary. Big client lunches equal large bills – charges like this will haunt you.

The same goes for your expense claims: employees will be more inclined to follow the right procedure if it’s simple. Use drop-drown choices on most options for expense forms and offer clear explanations for fields that may require them. This is best practice

If you want to save time on verifying and managing expenses, Soldo automates employee reports and our web console gives finance teams real-time access to spending information, together with extensive reporting and analysis.

Step 4: Put your business expense policy rules to use with prepaid business cards

Prepaid cards such as Soldo help put your spending rules into practice, automatically limiting spending to what’s permitted in your employee expense policy.

With Soldo prepaid cards, you get total control over spending. You can create daily, weekly or monthly limits – plus specific budgets for travel, accommodation, food and more.

Anyone in your business can have a card, and you can see activity on each account in real time, which reduces misuse and increases security.

Your finance team can enforce the guidelines you set in your company expense policy, and they’re able to refine spending criteria on the spot.

You’ll get instant full visibility – you can choose to get notified whenever a transaction looks out of place, and even block cards in a flash if you notice anything suspicious or if a card gets lost.

Step 5: Target expense reporting accuracy within your expense policy and procedure

When completing an expense report, employees must ensure that all data required is clear and complete. They should add notes and details to their reports, such as the purpose of business meals, and any other entertainment expenses. This should be clear in your T & E expense policy.

A Soldo prepaid card, along with the admin dashboard and mobile app, eradicates hours of manual reporting for employees and checking for your finance teams. Once an employee makes a payment and uploads a photo of their receipt, the Soldo app will automatically scan the important information for your reporting.

So, you get real-time expense reports, with total accuracy, giving you data that you can transform into valuable and actionable insight. Nice.

Plus, our web console integrates with your accounting system to automate processes and create in-depth reports, to help you spot patterns in people’s spending and address habits as they arise.

You can even share the data with your accountants, so they can help you shape your business expense policy as you grow.

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