Creating a Responsible Expenses Culture

By EmmaDecember 14, 2017

-This article was last updated on 25 March 2022-

Company expenses can be a difficult element to manage in your business. Creating a policy should, in theory, be enough, but this can often become a barrier to a responsible expenses culture and encourage people to claim for as much as they possibly can ‘within the rules’. Here we explore the ways in which you can create a responsible expenses culture amongst your employees.

Corporate business team office meeting discussing how to create a responsible expenses culture

Set your Caps at Appropriate Levels

Expenses should cover the reasonable costs of working whilst travelling, and this should take into account the different costs in different locations too. If your expenses policy leaves your employees out of pocket for reasonable purchases, then your employees will resent this and start looking for ways to get as much as possible back from it. If they’re comfortable, however, then you’ll find them much less likely to abuse it.

Make the Claiming System Simple

An expense application should not be difficult to submit and it should be paid promptly too. Failing to make prompt payment of an expenses claim will only frustrate and annoy employees, making them resentful of the system. Taking steps to ease the claiming process by introducing receipt scanning software and automated approvals systems will make the process easier and far less stressful for everyone.

Enforce your Policy

If you have a policy then you need to enforce it properly too. Letting something slide will only encourage it happening again. Whilst you do not need to be too harsh for an initial discrepancy, it is vital that you send the correct message if someone has misused funds, tried to claim a personal expense or has used the company card in an inappropriate manner. Your policy should be followed closely and fairly in cases of misuse.

Lead by Example

It may feel like you’re doing your employees a favour when you spend lavishly on them using your company card, but this goes against the ethos of a fair expenses policy. Demonstrating that you can live within the means of the expenses policy and follow it correctly will instil the same values in them. Simple steps like following the expenses system yourself will show your employees that it is a fair system and will create a responsible expenses culture.

Offer Incentives

Incentives are a great way to lower the expenses cost. If you set thresholds at which people earn rewards like vouchers for a meal out then they will actively monitor their expenses to keep the costs down. By offering a reward, you can create a more frugal approach to day-to-day expenses. It is important that these targets are achievable and scalable for different types of employees, but it is a great way to encourage active saving.

Offer Alternatives

Offering alternative options to the standard model is also valuable in instilling the right values in employees. When employees visit another city they may prefer to stay with a friend instead of in a hotel. Reward this by paying for dinner for your employee and a friend and you’ll still save money on the hotel. This positive reinforcement will get your employees working towards saving you money.

Reimburse Promptly

Slow employee expense reimbursement isn’t just time-consuming but damaging to workplace relationships too. Therefore, if you want to create a responsible expenses culture you must ensure that your employees are paid quickly for their out-of-pocket expenses.

Infographic: Responsible expenses culture