To achieve a high level of policy compliance and control spend.
Would you issue credit cards or loan money without having guidelines and policies in place?
Having proper expense guidelines is imperative to controlling spend. The likelihood of employees adhering to policy largely depends on how simple the process is to follow. So it makes sense to develop a company expense policy that your employees will find easy to understand and follow.
Employee expenses can represent a large slice of company spend and thus directly impact the profitability of that company.
In order to manage and control employee expense, a company needs to have a clear and simple policy so employees know what they can spend and how they need to report it. The expense platform needs to be easily accessible and visible to both employee and employer.
Unfortunately, not all companies enjoy a high expense policy compliance rate and not all expense tools and platforms are made the same.
Let’s look at some of the areas that influence expense policy compliance rates.
Not only should your company policy be easy to access, but it needs to be easy to understand across all levels. Not everyone knows what FBT is or what expenses attract GST.
So, write a policy that is concise, to the point and easy to apply so it can be followed.
When was the last time you updated your company expense policy?
If your policy is lacking up to date information and application, then it’s going to create confusion and frustration. Digital receipt, mobile applications and Uber along with other technologies have revolutionized the way employee spend is managed.
Companies consists of various types of employees, departments and roles and each incur expense for a multitude of reasons. Your expense policy should reflect diversity.
Maybe one of your employees booked accommodation that is $40 more expensive per night, but its location is within walking distance to a client’s office, while a cheaper hotel is an $30 Uber ride. Placing all expenses in the one compartment or making rules too inflexible will lower your compliance rates.
Effective strategies that increase policy compliance
A good expense policy should ensure your employees are clear on what is expected of them at every point of the process. It should cover all areas of expense such as meals, travel, accommodation, tips, entertainment and transport.
It is important that employees understand your rationale behind the rules of your corporate policy as well as incorporating clear levels of approval and points of contact.
Manual expense management systems are slow, costly and fraught with errors. Automating your expense management system will significantly increase compliance, speed and accuracy of employee expenses.
A solution that is highly configurable, with built in controls will effectively increase the rate of expense compliance, reducing confusion and conflict.
Automating your expense management system will increase employee happiness and productivity as your employees will no longer waste valuable time on collecting receipts, manual data entry and excel spreadsheets. The right expense management tool will simplify the process, optimise internal and external controls, maximise savings and ensure accurate reporting.
The ability to digitally capture expense data, report and analyse, it gives you insights to help you improve your expense policy.
Once you understand why your compliance rates are low, you can address the issues.
Rydoo offers you worldwide compliance and spend control.