Employee overspending is a sensitive topic, especially when it’s a judgement call. Approaching an employee whose spending has been spinning out of control can feel quite awkward, but corporate thrift is important, and such situations must be handled properly. Here are a few things to consider, together with practical tips for tackling any big spenders on your team.
It’s easier to approach an over-spender if you have a clear expense policy and the employee in question has contravened it. Having an expense policy is only part of the equation – you have to make sure that everyone is aware of it, and that compliance is essential. If you don’t have an expense policy, now’s a good time to draw one up.
If you have an expense policy, you should approach your employee as you would about any other policy contravention, taking into account the degree of overspending, and the value that this particular employee holds for your company.
There is overspending, and there is overspending.
Employees have been caught spending hundreds of thousands of pounds of company money on their gambling habits. In such cases, it’s not so much you who needs to approach your employee, as the Police.
Even in less extreme cases, when the contravention is clear, and the spending completely unnecessary, the overspending may spill into a matter of theft.
You should take legal advice and may find that the overspending is a disciplinary – if not criminal – matter. In which case you’ll need to stick to your company’s disciplinary policies, with legal advice at every step.
In most cases, however, employee overspending has more to do with them going a bit too far with Travel and Entertainment (T&E) expenses.
It’s these sorts of situations that require a particular sensitivity.
If your employees are working hard, travelling around on behalf of your company, they may feel that a certain level of comfort (and enjoyment) is justified. Perhaps they’re meeting potential clients and spending just a bit too much on them.
If you value your employee and you don’t want to demotivate them, then the best thing you can do is redirect them to your company’s expense policy – or draw one up if you don’t yet have one (see above).
Explain that you trust them to represent the company in the best possible way, that you appreciate everything they do, but that budgets dictate that their T&E spending must be reduced.
Tell them that you don’t want them to feel hard done by, or undervalued.
Work together towards a solution that keeps their spending under control, without building excessive resentment.
Of course, the best thing you can do – alongside your expense policy – is to implement a spend control solution that will prevent overspending in the first place.
Soldo comes with integrated Mastercard cards, a web-based administration console and an app. You have the ultimate say in how much your employees can spend, and you’ll get instant notifications whenever one of your employees makes a purchase.
You can also set automated money transfers to make sure that your employees always have the funds they need to get the job done – keeping resentment to a minimum.