As a small business owner, you’re finding it tedious and time-consuming to constantly have to approve employee expenses. Is there a better way?
Absolutely—write and create a company expense policy, which explains how staff can spend company funds. This will save you time and will allow you to automate company expenses.
However, how do you create a policy and what should it include? Keep reading to find out!
Write a Clear and Straightforward Company Expense Policy
A big part of business ownership is managing your expenses, so the first step is to write a comprehensive company expense policy. This is a document that all staff members will need to read and understand.
It outlines everything the company will, and will not, pay for, and should also explain when and how employees are reimbursed for out-of-pocket costs. If you’re struggling to get started, you can find a lot of useful free templates online.
Here are a few inclusions to remember.
Meal and Accommodation Limits
If staff are away from their regular place of work, or traveling, they may need to purchase meals or book hotels while on company time.
Clearly explain how much the company allocates for each meal and hotel stay—keeping in mind many companies won’t reimburse for alcohol or minibar charges.
If a staff member has to travel, do you prefer that they drive, get a cab, or take public transportation? Travel expenses can add up quickly, so be sure to add information on which methods you prefer.
Often, companies prefer staff to travel by the most affordable method, but others would rather pay more and have employees arrive quickly to their destination. The choice is yours.
Sometimes, staff will need to purchase office supplies or materials. You can either reimburse these via keeping a petty cash safe, or through the normal expense procedures.
Although it can feel like there are plenty of expenses to think about, the good news is that many, like office supplies and travel expenses, are tax-deductible for business owners.
Communicate Your Policy to Staff
Once your policy is ready, you need to make sure staff understand it. It’s best to hold an educational meeting, explaining to everyone how it will work.
Then, develop expense forms for reimbursements, or invest in a software program that makes it easy to manage expenses. Some companies use expense cards, which can work well—you can learn about virtual cards here.
Manage Employee Expenses With a New Expense Policy
Your business will be much easier to manage once you have a clear company expense policy. That way, staff will be empowered to spend company money correctly without needing to constantly ask for permission.
Remember that your expense policy is a living document, so aim to review at least once per year, making sure it’s still current.
Get started today and help your company stay on track with its finances!
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