Keeping your company’s expenditure in check can be a tough task. It’s usually not at the top of most business plans and it can be difficult to manage every little business expense reactively. As Benjamin Franklin famously wrote “Beware of little expenses. A small leak will sink a great ship.”
To avoid this, and to avoid painful reimbursements of unauthorized expenditure it is crucial for a business to set up a formal Corporate Spend Policy to plug the leaks and avoid any ambiguity. A survey by Certify showed that at least 20% of all expenses violate the corporate policy.
So how would you go about doing so? While companies greatly differ, a solid foundation may start like this:
- The first step is to write down all the expenses that will and won’t be authorized. This extends to how much will be allocated and to which categories spending may be done.
- What is not allowed? Make sure to put in plain text what your company will not allow. For example, you may authorize a rental car for an employee on a business trip but deny reimbursing speeding tickets, a gym membership may be authorized under an employee wellness programme but a manicure may not. Find out to avoid any out-of-policy expenses.
- Decide which spending will be done by the company and which spending will be done by the employee.
- Specify category limits – While you may authorize business trips, you may want to exclude first class tickets or penthouse suites at hotels. Ensure that there is no ambiguity in the policies. You may also want to specify which vendors you will allow spending on to further clarify your company’s spending position.
- Next it is time to appoint people to authorize the spending. Who will approve or deny spending requests? With Qashio’s dashboard there’s no need to continuously approve expenses, simply choose the approved vendors and categories and our cards will automatically decline unauthorized purchases.
- When your policy is drafted and management is in agreement, make sure that it is easily accessible. Put it on the intranet and in the employee onboarding manuals to ensure that it is easily accessible if employees have queries.
It is very likely that your first draft will either be lacking of or in excess of information. Collaborate with your employees to hear feedback and make any necessary changes to the policy to give your employees the necessary tools to perform their job efficiently, without any unnecessary leakage. This is also a great opportunity for leadership to figure out exactly how much employees need to spend. Update your policy regularly to be in tune with industry changes and company growth.
These steps may serve as a roadmap for your company’s spend policy, but every company is different. Be flexible! While it may be difficult to change the official company policy every time, Qashio’s expense management solution is not!
Seamlessly change, remove or introduce new limits and controls for your employees. With our control functions you can ensure that your employees always have the right amount of funds available to them. Your employee has a lot of business meetings this month? Increase the funds to match! Your employee is on vacation? Reduce their funds so that they can safely be budgeted elsewhere.
Eliminate out of policy expense headaches and endless questions about whether a purchase is allowed or not. With the click of a button and a touch of a screen you’ll always ensure proper spending!
Get in touch with our sales specialists today to understand how Qashio can work for you.