It’s tempting in policy-making to default to old practices, those of other organizations and what can be found through research in deciding how a business and its employees should be governed going forward. When it comes to expense reimbursement, an expense policy template is an invaluable tool for discovering new ideas and remembering what you might otherwise forget. But before downloading one (which you can do later here), answer some basic questions.
1. Why create an expense policy?
Before this process can really get started, key stakeholders should agree on an important but often forgotten question: Why are we doing this? Companies implement expense reimbursement for any number of reasons: to avoid the hassles of company-car ownership and the excessive expense of car allowances, to better compete among employers seeking the best-possible employees, and to prevent employees from bringing bills or even lawsuits in an attempt to recover out-of-pocket expenses. What are your reasons?
2. What should employers and employees expect from one another?
Well-defined guidelines now will head off conflicts later, so go into the process expecting to emerge with a document that includes plenty of detail. Add as many points as needed to cover anticipated contingencies, such as excluded activities like personal trips and commutes to and from home. There should be explanations of policy violations and accompanying discipline. (The goal here to is to prevent the most common violations, which are fictitious expenses and inflating actual expenses.) Finally, make it clear the policy applies to everyone from top managers to the most-junior interns.
3. What processes will employees be expected to follow?
The goal here is a reporting procedure that is as easy as possible for the employee and as accurate as possible for the company. Accurate documentation comes from a rigorous process that builds in safeguards, encourages questions, and includes a monitoring system that will uncover abuse. Key to the explanation of any process are timeframes. How long does the employee have after an expense is incurred before it must be submitted for reimbursement? How long should the employee expect to wait for that reimbursement?
4. How will the policy be communicated?
People today expect to be able consume information through multiple channels, and they don’t lose that expectation when they come to work. Be ready to offer your new policy to them on paper, in a pdf file, in a slideshow or a simple video. But don’t stop there. Train managers on the policy and give them answers to the employee questions you expect. After all, managers are the people employees go to for help. Encourage that rather than funneling all those questions to Accounting or Human Resources. Your AP and HR people will thank you.
Now, download your expense policy template
With these four basic questions answered, it’s the right time to move toward formulating your new expense policy. We have developed a document that will set you on the right path with valuable tips, a suggested structure for the expense reimbursement policy, and lots of the “nitty gritty.”
It’s all there. Download it here.