Weak or non-existent manual systems and cost policies are the main causes leading to conflicts related to business costs. A lack of policies and persistent manual processes also facilitate budget abuse, whether accidental or intentional.
When business leaders entrust hundreds of millions of company money to employees, they will certainly want some rules about how to use that money. So what does a good corporate expenses policy look like? Here are a few simple tips for crafting the best policy.
To develop cost-effective policies
Cost has long been a source of conflict between finance teams and business departments.
Complex rules for how to recognize, classify and reimburse expenses quickly lead to inefficiencies and mistrust between two vital business functions: those who create money and those who protect it .
1. Decide who gets the grant business credit card
Ideally, employees should not be asked to spend personal money on work. Human resources can help determine which department, seniority level, or department has the greatest need for expense cards. Most modern expense management platforms can automatically allocate cards based on these criteria.
2. Determine the card user's responsibilities
Every company has a certain set of values and most of them are stipulated in writing. Is your business frugal or spending heavily? Keep costs stable or cut them at all costs? Explain how your values relate to company spending.
3. What types of expenses are accepted?
Corporate cards cannot be used for personal expenses under any circumstances. And it must only be used in a manner directly related to the card bearer's job function. Automated systems can help here too, by limiting usage to certain types of purchases.
4. Determine spending limits
Spending limits need to match needs. For example, the frequency of employee business travel and the value of a particular type of spend to the business. Again, modern expense platforms can limit spending on each card within a pre-allocated limit.
5. Explain when prior approval is required
State that cases where greater costs such as long-haul flights must be confirmed in advance. Describe who needs it approve and on what basis costs are likely to be approved.
6. How do employees need to declare expenses?
What do employees need to report? How should costs be classified and what additional information is needed? One of the key advantages of platform-based management is that employees can use an intuitive application to record, categorize, and store purchases. No more struggling to find bills at the end of the month and trying to remember what they are for!
7. Compliance
Explain in plain language how laws and regulations (e.g. anti-bribery and corruption laws in key markets) affect your company's incurred costs.
8. Security
What steps should employees take to keep their cards safe? Describes how to report a lost or misplaced card and within what time frame.
Create a Corporate Expense Policy
Although when creating an expense policy, the practitioner does not need to be an HR expert to write instructions for employees, understanding the key elements will help the business a lot.
Many accounting agencies can provide reference expense policy templates. You can learn more.
Top tips for new expense policies
- Update policies as necessary
- Easy to search
- Get support from the finance department, management and employees
- Enforce the rules consistently
- The finance department understands how to implement policy
By building an effective cost policy, businesses can better control spending, minimize risks and improve operational efficiency.
Bizzi Expense application helps CEOs IMMEDIATELY have "weapons" to help establish corporate expense policies and strictly control spending
Bizzi Expense is a streamlined cost management application for businesses. Here's how Bizzi Expense expense approval automation can help your organization:
Support in developing cost policies for the organization
- Easily set up expense usage policies for your organization
- Manage billing information for each user: MST, invoice receipt email, address, personal information
- Manage expense categories according to organizational needs
Standardize the process of automatically creating and approving costs
- Build an approval process flow for each spending limit, consistent with the nature of the company's costs
- Decentralize approval and management of permission groups according to each department level
- Create and send expense requests according to various categories: travel, business, reception, stationery,...
- Create and approve payment requests and expenses conveniently anytime, anywhere, instantly via mobile app
- Conveniently attach invoice information and documents to each expense
Expense management departments and projects in real time
- Record expenses quickly in real time
- Manage costs by each category/department/project
- Minimize risk and reconcile payments faster
- Allows exporting expense list excel files.
Control costs strictly according to budget
- Set up and divide budgets according to fiscal year and organization/project/department scale
- Proactively control budgets with the ability to set spending limits and assign budgets to each category/department/project
- Automatically warn when spending exceeds the allocated budget
- Easily track remaining budget information and spent expenses
- Dashboard system reports budget compared to reality to help evaluate performance and effective financial operations
- Synchronize with the organization's cost management system and payment request approval process
To learn more about automating the expense approval process for your company, book a demo with Bizzi today!
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