Expense Management Policy: A Guide for Modern Businesses - Brink's Money
Expense Management Policy: A Guide for Modern Businesses
23 Jan 2020
Managing expenses for your business isn’t the most exciting part of business operations, but it is one of the most necessary. After all the work that goes into making sales and earning a profit, you don’t want that hard work to go out the window because of a half-thought-out company spending policy that isn’t enforced by leadership. The easiest and best way to avoid that risk is by setting up an expense management policy that is accessible by all employees, backed by leadership, and enforced by managers.
But, where to start?
That’s where we come in. There are a lot of programs that claim to help solve these common problems, but few with a record as strong as Brink’s. With over 160 years of experience supporting businesses and business owners across every industry, we know how to make life easier for you and our products reflect that. Intuitive, clean, and with the controls firmly in your hands--not ours.
We know how hard you’ve worked and we want to make that hard work go further. With Brink’s Business Expense, we take some of the stress off your plate to get to the end of the process a bit quicker. Read on for some tips on how to craft the best expense policy for your company so there is a frictionless process in place before anyone even thinks of spending company money.
What does an expense policy look like?
The best expense policy will be tailored to your business, your people, and your processes. While it may be easy to see what similar companies are doing and adjusting their policies to fit your own, the best path forward is constructing custom rules and regulations for your needs and use cases. That way, instead of interrupting the finance or leadership teams whenever payment is required, your new expense policy will provide clear answers on how to manage as needed.
A lack of clarity often leads to policy violations and soft enforcement of the policy you worked so hard to create. Therefore, we recommend writing the expense policy out in full detail and keeping it somewhere visible and accessible. The goal is to create less work for everyone involved and to keep the processes streamlined.
What to include
While “custom” isn’t a definitive answer to what an expense policy looks like, there are parts of every policy that will always need to be included. Let’s dig into the details for what your expense policy needs to have:
Budgets for each expense category
In an ideal world, this expense policy will be a living document that shifts with the company. As such, remember that budgets can change and adjust depending on the seasonality and supply/demand that your company creates. Instead of trying to write firm rules, it’s often more effective to create general guidelines for budgets and how they should be used rather than tie yourself to strict numbers.
Beyond that, you can help segment out spending by creating specific budgets for different kinds of spending. Does your team travel a lot? Consider that when budgeting for plane tickets, accommodations, meals out, etc. Is your office growing? Bring that top of mind as you plan how much will be needed for office supplies.
If we’re talking about how money is being spent, especially when employees are fronting the money, we need to talk about how they will be repaid. This is known as a reimbursement plan and the more explicit you are about the requirements to claim expenses, the more likely they will be to actually follow the process.
Thankfully, today there are a number of tools made for businesses that help smooth over the process and remove the hurdles. Instead of fretting over a lost receipt or trying to convince an employee to finalize their expense claim, when you work with Brink’s Business Expense, those issues don’t exist in the first place thanks to the intuitive interface. In fact, Brink’s Business Expense completely eliminates the need for reimbursements because the burden of paying is no longer on employees, but is proactively and fully owned by the company. When you remove the need for employees to pay for expenses out of pocket, there is no delay or friction in your expense management.
Suitable payment methods
So far we have figured out how much money can be spent, and how to reimburse employees. But the missing piece of information is what methods the team can use to actually pay for purchases. Make sure you have clearly written procedures for each of the following:
-Advances on employee expenses. This may not apply to your business, but if it does, be sure to spell out explicitly how it works. Usually this is used when an upcoming cost for a product or event (think tickets to a conference) are higher than an employee can be expected to cover upfront, on their own. Be clear about use cases for your specific business to ensure there are no grey areas.
-Payments from employee’s personal accounts. We already discussed reimbursement plans above. Be sure to state the circumstances in which out of pocket expenses are appropriate and when the costs may not be used or reimbursed.
-Payments online. These payments are the easiest to lose track of, especially if auto-payments are turned on and the company credit card number is easily accessible. Make sure team members understand what information is required to share with the finance team as they make these digital payments.
-Payments with company card. How are payments recorded? Who is responsible for monitoring the company card? When payments start flooding in both from online and brick & mortar retailers, keeping track can get out of hand quickly. To save your team the headache, consider using programs that help consolidate data into one platform so the expense organization is done automatically instead of manually.
Now that we’ve talked through how to eliminate the grey areas in a modern expense policy for you and your employees, double down and back the new policy with a card program like Brink’s Business Expense. With our state-of-the-art platform, we help businesses of all sizes streamline their expense processes to save time, stress, and money. To learn more about how Brink’s Business Expense works and how we can best serve you, don’t hesitate to get in touch with our team today!
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