Does your company have an expense reimbursement policy?
Businesses should keep a close eye on their employees’ expense claims. There are many reasons to do so, with claims fraud topping the list.
One study shows that about 15% of business fraud comes from reimbursements. It doesn’t even show up on records until about two years after the claim. During which, business can lose as much as $26,000 per year.
I can’t stress enough how important a well-structured expense reimbursement policy is. It’s the best way that you can lay down rules on what employees can and can’t claim. Plus, it also makes your job easier in detecting frauds, should there be any.
The Temptation is Strong
I have been in the sales force for quite some time now. It’s an autonomous job with great flexible time and freedom to make decisions on my own for as long as I meet my goals and customer satisfaction.
The job would sometimes require long drives to get to my customers and sometimes involved staying at hotels and dining out. I must admit, every once in a while, it’s inevitable to splurge on the best hotels and delicious meals during sales calls. It can be very tempting to throw in some personal spending every now and then.
It is risky, though, especially with how stringent our HR’s expense claims policy is. However, their policy also made the reimbursement process fast and easy. I just upload all my receipts, and list down and categorize my expenses for approval.
How to Make A Best-Practice Expense Reimbursement Policy
Setting guidelines for reimbursements reduces the risk of claims fraud for your company. It gives your employees a set of rules to follow while giving you control over their expenses. As long as you keep the tips below in mind, creating an expense claims policy should be a breeze.
Keep it simple and easy to read
The policy should cover the expenses that employees can and can’t claim. Not everyone has the patience to go through a lengthy document, so aim for a simple and easy-to-read policy. Go straight to the point and ditch the jargons. Doing so will help employees remember the rules and adhere to them.
No one should be exempted from following the expense claim policies. However, some companies allow managers to submit more claims than their subordinates. Since they are a step above them, getting their out-of-policy claims rejected is highly unlikely. If it becomes a practice, employees will start to think of ways to get away with claiming unreasonable expenses. You can avoid this scenario by making sure that the policy is fair and doesn’t exempt anyone from following the rules.
Flexibility is the key
Remember to incorporate flexibility in your expense claims policy. Employees shouldn’t have to spend out of their own pockets for official business trips. Nor do they have to scrimp on accommodations or quality of food they eat. A little bit of flexibility will go a long way in keeping your employees happy, productive, and loyal to the company.
Remember to update and make it easy to find
As technology progresses and legislation changes, reviewing and updating the policy for applicability is a must.
Another important note is to make sure that your claims policy is accessible. May it be on paper or in your company’s database, make sure that employees can get a copy hassle-free. This will encourage them to actually take the time and go over the policy. As they get familiarised with the guidelines, rules will be easier to enforce.
Pay on time
Submitting expense claims is stressful and emotional, especially if employees pay out of their own pockets. I’m lucky that my company made our work expense claims process fast and easy. Plus, they make sure that reimbursements are paid promptly, every single time.
You shouldn’t stop with creating a solid expense claims policy. You can step up and make everyone happy with a faster and more efficient expense claims process. If your company has extra budget, why not invest on automating expenses? This way, you can keep everyone happy. Employees can claim their expenses faster, and the company can keep better track of everyone’s spending.