4 Tips to Creating a Robust Expense Policy
Are you looking to revamp and refresh your travel and expense management program to ensure it supports business goals? Savvy managers recognize the long-term benefits of a corporate spend policy that strikes a balance between robust reporting/analytics and user experience. PayStream Advisors has pulled together four tips to help your business boost visibility and gain control over corporate travel spend.
1. Clear communication is your first line of defense.
While many organizations certainly fall victim to intentional expense report fraud, most employees generally try to stay within their corporate spend limits. Problems arise when well-meaning travelers aren’t fully educated on the ins and outs of their company’s expense policy. First and foremost, make sure your employees know their responsibilities and how excessive travel spend can necessitate cuts to other areas of the budget.
Two-way communication here is key. Not only should management communicate policy limits effectively, they should also be open to feedback and suggestions from road warriors who know the best vendors in their markets. You can ask them to suggest their own budgets for client entertainment or other activities, pushing them to do a little background research and comparison shopping. This will result not only in cost savings, but it will also achieve greater policy buy-in and accountability among employees who feel the appreciation and support.
2. Help employees help themselves.
Automated policy regulation can not only reduce time and effort that is normally spent following up on non-compliance claims, it helps to prevent them altogether. Employees are gently guided and nudged onto the path of compliance through automated flags that alert them to missing expense report fields and violations, giving them a chance to self-correct prior to submission. This eliminates costly management involvement and penalties after the fact.
3. Share the wealth.
Enlist your stakeholders to help you stay within your travel budget. For frequent travelers who rack up tens of thousands in annual travel costs, create incentives to lower individual spend. Challenge them to beat their own benchmarks. For example, for every 10 percent they reduce their airfare and hotel spend, they are rewarded with 2 percent back.
Similarly, expense managers can use corporate credit cards with rebates and rewards, some of which can be credited back to the employee. Even an extra $20 or $30 here and there equates to a few free meals and it’s a great way to keep employees engaged and focused on the bottom line.
4. Leverage travel booking tools when possible.
Encourage or require employees to make reservations and book flights through a platform that can be integrated with your overall travel and expense management system. These tools provide reporting and analytics functionality that make it easier to see where travel funds are spent without having to reverse-engineer a report from the company’s accounting system.
Most importantly, you can configure these tools to restrict purchases to your list of preferred vendors. You’ve worked hard to develop partnerships and negotiate special rates and amenities with these vendors; make sure these efforts pay off.
Even organizations that operate using a mostly manual expense reporting process can achieve tremendous benefit just by enforcing existing policies and requiring employees to submit receipts along with expense reports. As your program matures, use what you learn to dictate a larger overhaul and leverage automated tools where it makes sense.
*This blog was written and provided to Insperity by PayStream Advisors, a research and consulting company, and is being used with permission.