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11 Tips for Creating an Expense Policy

11 Tips for Creating an Expense Policy

Expense Policy TipsCreating an expense policy can be a time-consuming process; but when you consider that almost 20 percent of T&E expenses fall outside of policy (Travel & Entertainment Expense Management Report, Aberdeen Group, August 2006), it makes sense to invest the time and effort. Here are some tips from Concur to help you get started:

1. Ditch the jargon

Write the policy to cover the basics but don’t be afraid to revise it later; it probably won’t be perfect on the first attempt, so remind people to use common sense. Also, be sure to edit your policy for clarity before it’s published. Double-check that it’s easy to read and not bogged down in jargon. The easier a policy is to understand, the easier it is for your employees to follow.

2. Make it fair

No one should have to pay out of pocket if they spend sensibly. Create a policy that is generally regarded as fair and then make it easy to find and follow.

3. Invite participation

Get buy-in from your staff before you implement the policy. Ask team members to participate in the process. If they help develop the expense policy they’ll see why it’s necessary and will be more likely to stick to the rules and encourage others to do the same.

4. Use sensible, localized rules

Sometimes a one-size-fits-all policy won’t work across an entire company. Write your policy to guide behaviour, but be flexible enough to adapt to local requirements— such as higher hotel costs in more expensive cities. You could include a table of acceptable regional rates or use a system that flags out-of-policy spend at the time it’s booked, to avoid unpleasant surprises later in the expense-claim process.

5. Make it flat

Unless there is a very good reason to have different rules for different people, create a policy that applies to all employees across the company. Keep it fair and simple. All-encompassing policies are also easier to implement, manage and control.

6. Make it easy to find

Even the most fair and equitable policy won’t be followed unless people know about it. Make sure yours is visible. Email it to employees, put it on your noticeboards or intranet, or print a copy for every staff member.

7. Emphasize the positives

Implementing a new policy will require a period of adjustment for employees. You might hold a training to explain the reasons for implementing/changing the policy so that everyone understands its benefits and purpose. If there’s a policy in place that everyone understands, the chances are it will be easier to approve submitted expenses.

8. Help managers lead by example

Since almost 20% of all submitted expense claims contain out-of-policy spend, it’s sensible to focus on reducing that percentage.

Managers who approve expenses are your first line of defense in the expense-claim process, so it’s good to get them on your side. Setting management targets for policy compliance can drive down the number of out-of-policy claims. Similarly, familiarizing managers with the content, the importance of compliance, and the reasons for implementing the policy can help them confidently enforce the rules.

9. Remember it’s emotional

Consider the emotional side of expense claims. Employees are usually spending their own money when they pay for expenses, so they will want it back as soon as possible. A good system makes it easy for employees to submit their expenses and receive status updates; it also speeds the payment process.

10. Consider helpful software tools

Implementing an expense policy is a first step, but it shouldn’t end there. Once you have a great policy, you might want to consider using time-saving tools to manage the entire expense-claim process.

Turning your paper-based expense process into an automated one will soon provide real cost savings. You can take advantage of free trials to test the software tools before you commit to buying. Most providers will be able to demonstrate a rapid return on investment.

Moreover, implementing an automated solution will save time and allow you to focus on your core business.

11. Leverage existing technology

If your employees are using smartphones, you’ve probably already invested in mobile hardware; if this is true, make sure you choose a solution that works with your existing mobile devices and allows for the submission of digital and photographed receipts.


For an example expense policy template, view Concur’s full report (PDF).

Brittenford Systems has partnered with Concur, the most trusted leader in travel and expense management for over 20 years, to bring our clients Concur’s solutions at an exclusive discount. If you are interested in learning more about how you can bring your company an integrated travel and expense management process, please reach out to us, or visit our Concur Page for more information.


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