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  • 1. Taking the pain out of expenses11 Tips for Creating an Expense PolicyCreating an expense policy can be a time-consuming process; but when youconsider that almost 20 percent of T&E expenses fall outside of policy1, it makessense to invest the time and effort. Here are some tips and a template to helpyou 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.1  Travel & Entertainment Expense Management Report, Aberdeen Group, August 2006 www.concur.com 1
  • 2. 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. www.concur.com 2
  • 3. An Example Expense Policy Template: How to use the template:At its simplest, an expense policy should cover the following categories: Read the notes in the center column. Then use the headings in the left column1. Statement of purpose to create your own document. Feel free2. Company expectations and policy compliance to copy or edit the examples to suit your needs.3. Areas of ambiguity Please note:4. Subject areas: This is not a legal document—it’s a a. travel starting point. b. travel-related expenses The values included on this policy are only approximate guidelines, but you c. accommodation can check the amounts against your d. food & entertainment industry sector, company size and employee averages. e. other expense typesThe following pages provide a more detailed explanation for each category, aswell as examples of language you can use when you create your own template.Section Explanation Example wordingStatement of Why is there an expenses policy? This expense policy applies to all employees of (insert company’s name here; e.g., Our Company) when they travel for business purposes or incurpurpose Set some basic guidelines—make it factual, not business-related expenses. scary. Include: Please also refer to the following company documents: • Who the policy applies to (managers and employees) • HR policy • Date of policy implementation • Travel policyCompany Write a brief note here to explain: When you incur or submit expenses we expect you to:expectations • What the company will do to help people • Behave honestly, responsibly, and within the guidelines of this policy claim expenses • Submit expenses within 30 days of incurring them (to help you get paidand policycompliance • What the company expects in order to more quickly and support our finance team’s needs) reimburse employees • Keep all your receipts • What happens if they fail to comply with policy We take this policy seriously and expect you to do the same. Breaches of policy may result in disciplinary action or termination of employment.Areas of This section explains common areas of Your manager should authorize all expenses, but if it’s not possible, their ambiguity/confusion, such as: manager may also approve expenses.ambiguity • Who authorizes expenses If you’re traveling/incurring expenses with other Our Company employees • How quickly they are reimbursed the senior person should always pay. • Who pays (when more than one employee If you are in doubt over whether an expense is in policy, ask your manager. is present) When you submit the claim, provide written justification in the space provided. www.concur.com 3
  • 4. Section Explanation Example wordingThe nitty gritty: types of expenses—what’s allowableThe main body of your expense policy should cover the standard expense categories—complete with rules about what is or isn’t permitted.Travel This section should cover the basics, This travel section of the policy covers the various ways we think people at Our such as: Company are likely to travel in the normal course of business. Which suppliers (if any) are preferred. If you are traveling in a way that is not covered by this policy or have questions that are not answered here, talk to your manager and include a note with your Which booking methods are preferred expense claim when you submit it. (e.g., via a chosen travel agency vs. through an integrated travel booking The policy includes information about how and when you should travel by car, system) for air, train and taxi. It includes details about our commitment to sustainable travel options as well as the importance of choosing the lowest-priced logical method of • air travel transport available at the time. • rail travel Please note: All bookings should be made through our travel agent XYZ Travel. • rental cars Travel that is not booked at least 3 days in advance will not be reimbursed without • mileage approval from the CEO. What range of fares are acceptable; e.g., All travel should be booked in standard/economy class. You are welcome to use lowest logical fare vs. always cheapest. your own loyalty schemes, as long as this does not prevent you from booking the It should also include a section on: lowest-priced logical choice available. • The use of company cars Personal travel may be combined with business as long as there is no additional • The use of personal cars for business cost to the company. • Mileage reimbursement rates (Other applicable company-related details should be added as needed here.) • How far out of their normal commute must people travel to be able to claim mileage? • Insurance (is this covered by the company or must individuals insure themselves?) You might also include answers to these questions: • Do you encourage use of sustainable transport? • When is it okay to take first class or business class? • Does public transport take precedence over taxis vs. personal cars? If so, when? • How far in advance must trips be booked? • Is pre-approval needed before employees book travel or only if the cost is over a certain value? Cont. overleaf. www.concur.com 4
  • 5. Section Explanation Example wordingTravel-related This section should be a list of travel- The following travel-related expenses are acceptable and Our Company related expenses that are acceptable employees will be reimbursed for these expenses:expenses and in policy. • Baggage (no more than 2 bags) and advanced-seat bookings • Parking • Foreign-currency charges • Visas • Tips (up to 15%). This does not apply if the tip has already been included in the bill. • Use of a GPS with rental cars for driving in unfamiliar territory The following travel-related expenses are not acceptable. Do not put these on your expenses claim: • Laundry service/dry-cleaning (unless you have stayed for business for more than 4 nights) • Mini-bar contents • Movies/videos • Parking fines • The loss/theft of goods (this should be covered by your own travel insurance— of which you can reclaim $170 annually) • Childcare • Petcare • Any personal elements of your business trip • Personal car maintenance or damage to personal vehicles while on business • Spa treatments and health/fitness clubs • ToiletriesSection Explanation Example wordingAccommodation Any preferred booking methods (e.g., When booking hotels we expect you to use our preferred hotels. through a travel agent online booking The maximum we will reimburse per night is $160 + taxes (for example—but this tool) or preferred suppliers should be depends on region). This amount does not include meal costs. listed here. You are responsible for all hotel cancellations and for reclaiming reimbursements It could also include instructions (less cancellation fees) from the hotel directly. regarding reimbursement if people stay with friends/relatives. You must always indicate your overnight accommodation location so we can comply with Duty of Care requirements. Either inform your manager or share your travel itinerary with your manager using TripIt ®. If your manager is not working when you are traveling you must inform their replacement. If this is yourself, please tell HR. You are not allowed to upgrade your room while traveling on business with Our Company.Section Explanation Example wordingFood & This section should set limits on Our Company will reimburse employees for all meals while they’re traveling—up to meal prices, explain what is covered $10 for breakfast, $15 for lunch and $25 for dinner.entertainment by a per diem, provide guidelines on Client meals/entertainment costs may be higher. All entertainment claims must when to claim meals and explain any include the following details: business reason, venue name and location, name other ambiguities surrounding and company of all attendees. food/entertainment. Alcoholic drinks may only be claimed if consumed with a meal. Unless you are entertaining clients, in order to claim meals/food you must have met the following conditions: • You’ve been away from the office for more than half a working day • You’ve traveled more than 5 miles from the office/your home • You may claim for breakfast if your journey started before 7:00 am. www.concur.com 5
  • 6. Section Explanation Example wording Other This section should be The following expenses are acceptable and Our Company employees will be reimbursed for them. a list of other expenses expense types • Professional membership fees (where these enhance the standing of the individual and by that are acceptable and association, the company) in-policy • Hotel internet fees • Postage for business purposes • Mobile data-usage fees when traveling abroad (provided it has been pre-booked) • Personal phone calls (up to a reasonable limit) The following travel-related expenses are not acceptable. Do not put these on your expenses claim. • Computer/other equipment • Magazines/newspapers (unless essential for a justifiable business purpose) Want more help? Just ask! Concur is an industry leader in expense management solutions. With nearly 20 years’ experience in this field, you can trust that our advice is sound. We actively encourage people to develop their own expense policies, which is why we’ve provided this template. But if you want more assistance, we’re here. We have the solutions and experience to help, and once you’re committed to using our tools (but before you’ve signed on the dotted line) we’ll give you a detailed pre-built template to ensure you are implementing the most suitable expenses management software solution for your company. Then all you have to do is make the fundamental policy decisions about what and how much to approve.About ConcurConcur is a leading provider of integrated travel and expense management solutions. Our adaptable web-basedand mobile solutions help companies and their employees control costs and save time. Concur solutions adaptto individual employee preferences and scale to meet the needs of companies both small and large.www.concur.com©2012 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies. All other company and product names are the property of their respective manufacturers.Specifications and other details listed are accurate as of printing, but may change without notice. WP SMB EXPENSES POLICY NA 2012/12