Role of Effective Policy Enforcement in Corporate Expense Management

Small business travel expense management sometimes does not pay due importance to the imperative role of policies. It is often overlooked as a time-consuming process, but this negligence can potentially cost your business a lot. In this article, we explore the dire need for policy creation and enforcement:

 

Every business needs to define its company’s official expense policy in order to develop and expand its business. This is due to the fact that travel and expense are the two areas where companies can easily control their expenditure. It, therefore, makes sense that every company establishes clear guidelines to manage their travel expense process effectively. They need policies to assign responsibilities to all the stakeholders, namely, the employees, the managers, the travel admins, the finance team, and the HR, among others. Doing so will ensure more control over business travel expenses and will act as precautionary measures.

 

Therefore, let us understand the role of travel and expense policies in corporate expense management and why it is necessary to employ them effectively. But first, let’s explore:

 

Reasons Why Businesses Avoid Expense Management Policy Enforcement: 

The two of the biggest reasons most businesses steer clear of dedicating resources to creating and enforcing expense policies are:

 

1. The time taken.
2. The cost involved.

 

However, some businesses fail to notice that the time and money spent drafting and enforcing these policies will reap more fruits for their businesses in the long run. Administering an effective policy of expense management will in fact, come in handy in a three-fold manner:

 

• Define travel spends.
• Identify unnecessary expenses.
• Control excessive expenditure.

 

To achieve these three goals, communication is the key. Effective communication helps enforce these policies quickly and effectively, which further helps decrease violations and subsequently increase policy compliance for better travel expense management.
  

Importance of Employee Expense Management Policy:

Several reasons advocate the import of travel and expense policy in company expense management. The following reasons will suggest why it should be taken seriously-

 

 

 

 

 

• Employees
• Managers or approvers for reimbursements
• Finance and accounts department
• Audit team
• Human Resources

 

It can even define conditional approval flows for multi-level approvals for an even more efficient expense management solution.

 

 

 

 

Key Features of an Effective Policy for Corporate Expense Solutions: 

A good expense policy must align with a company's objectives. However, it is even more important that such a policy must make expense reporting and claims filing effortless and efficient for business expense management. Here are some of the critical points that can be kept in mind while creating a functional policy:

 

 

 

 

 

Corporate travel and expense management is incomplete without the addition of a comprehensive travel and expense management policy. For a policy to be effective, it needs to be implemented through a single travel and expense management tool that enables seamless tracking and quick reconciliation of business travel expenses. So, automate your travel and expense management for better policy compliance and efficient business travel. Explore more!

Frequently Asked Questions (FAQs) About Travel and Expense Policy 

Q1. What is a corporate T&E policy?

Ans. A T&E policy defines the set of rules regarding reimbursements to employees going on business trips for corporate travel expense management. It states all the essential expenses that can be incurred by employees executing company transactions.

 

Q2. Can a Travel & Expense policy make a company audit-ready?

Ans. Yes, a travel and expense policy makes sure to align a company with the tax guidelines laid down by the government, making it more compliant with the help of a business travel and expense management software.

 

Q3. How does a T&E policy define approval flows?

Ans. A T&E policy states how approvals will be given by defining the budget. This will ensure whether an expense claim will be accepted or rejected. It also defines the approving authorities who will accept or reject a request for reimbursement.

 

Q4. Can a T&E policy define the timeline for approvals?

Ans. Yes, a T&E policy clearly defines the timeline for approving requests so as to streamline processes and achieve robust travel & expense management.