How to Enforce your Business Expense Policy

By EmmaFebruary 9, 2018

–This article was last updated on 7 October 2021-

Every company should have an expenses policy in place and they should have a solid plan for enforcement too. Employees can manipulate expenses to their benefit, so it is important to protect yourself against misuse. One case of over claiming by a few pounds will make no difference to your company, but 100 small claims will very quickly rack up to be a problem. Here we explore how you can enforce your expenses policy.

Policies Word on Folder Register of Card Index.

Be Transparent

A simple and easy to follow expenses policy will be much more accurately followed than a complex one. Make sure all of your employees have easy access to a clear, written expenses policy that they can consult. This will remove any ability for employees to claim that they didn’t know it was wrong.

Be Clear About the Repercussions

Being clear about the repercussions of abusing or misusing the expenses policy will help you to enforce it immediately. Having a clear cause and action relationship between misuses and penalties will make the process very simple for everyone to follow and they won’t be able to dispute it when they are penalised.

Act Promptly

Expenses disputes are unpleasant to deal with, but they need to be dealt with promptly in order to send the right message. As soon as the claim is submitted it should be reviewed and either paid or questioned. Acting promptly will send a clear message that there is no wiggle room for misuse.

Establish an Extenuating Circumstances Policy

There are times when it may be reasonable for an employee to exceed an established expenses policy, but it is important that you handle this in the right manner. If, for example, an employee is stuck on a train and delayed by several hours into the night, it would be reasonable for them to exceed the policy for an extra cup of coffee or some additional food. In these cases there should be a clear system that enables them to submit an extenuating services claim, explain the situation and have the expense approved without any hassle.

Require Itemised Receipts

Whilst not always possible, requiring that itemised receipts are submitted through a receipt scanning system will make employees less likely to abuse the system. They’ll be less likely to make an inappropriate expense if they know that the item in question will appear on a receipt, which they then have to submit.

Automate the System

Expense management systems enable you to set limits and terms for claims that will prevent abuse from being attempted in the first place. Creating digital fences around expenses will do some of the work for you and automatically stop large claims from being made. This digital enforcement is a great way to put non-negotiable caps in place.

Operate a Fair System

A fair expenses policy and system is far less likely to be abused than an unfair one. Work towards setting up a fair system that people can engage with responsibly and you’ll have less enforcement work to do.