Company Expense Policy: Tips & Template

Updated November 2024 - Managing company expenses efficiently is a cornerstone of running a successful business. A well-crafted company expense policy ensures clarity and transparency in managing employee expenses, reducing unnecessary costs and boosting employee engagement. Conversely, a poorly designed or absent expense policy can lead to confusion, excessive spending, and even compliance issues.

In this guide, we’ll walk you through everything you need to know about crafting a corporate expense policy that works for your business. We’ll also explore how expense management software like Weel can streamline the process.

What is a company expense policy?

A company expense policy is a formal document outlining how employees can incur and be reimbursed for business expenses. This includes guidelines for acceptable expenses, required documentation, reimbursement processes, and approval workflows. For example, a travel and expense policy template can serve as a starting point, detailing allowable travel expenses, such as transportation fares and accommodation, along with procedures for submitting claims.

For employers, a clear corporate expense policy helps minimise unnecessary costs, prevents fraudulent claims, and ensures compliance with company goals and regulatory requirements.

For employees, it provides clarity about reimbursable expenses, submission procedures, and expected reimbursement timelines.

By setting expectations upfront, a well-designed expense policy fosters accountability and fairness.

Why does your business need a strong expense policy?

A comprehensive employee expense policy offers the following benefits:

• Clarity and consistency: Employees understand what qualifies as a reimbursable expense, reducing disputes.
• Cost control: Clear limits prevent overspending on work-related expenses like travel, accommodation, or professional dinners.
• Improved compliance: Policies help align expenses with company goals and legal requirements.
• Streamlined processes: With pre-defined expense categories and guidelines, approvals and reimbursements are faster and easier.

Key components of a company expense policy

To craft an effective corporate expense policy, include these essential elements:

1. Purpose and scope

Outline why the policy exists and who it applies to. For example, does it cover all employees or just specific departments? Clarify its role in managing business expenses.

2. Expense categories

Define reimbursable types of expenses, such as:

• Travel expenses (e.g., transportation fares, accommodation, and meals).
• Client entertainment (e.g., professional dinners or meetings with clients).
• Work-related expenses (e.g., software subscriptions, office supplies).

3. Spending limits

Set clear spending caps for specific categories, like daily meal allowances or maximum budgets for client entertainment.

4. Preferred payment methods

Specify acceptable methods, such as company credit cards, virtual cards, or employee out-of-pocket payments with reimbursement.

5. Documentation requirements

List what employees need to submit for expense claims, such as itemized receipts, proof of purchase, or credit card statements.

6. Approval process

Detail the approval workflows, including who must authorise expenses and the steps for obtaining pre-approvals for high-cost items.

7. Non-reimbursable expenses

Clarify ineligible costs like personal purchases, beauty treatments, gym memberships, or personal trips disguised as business travel.

8. Reimbursement process

Outline the process for submitting expense claims, including deadlines, submission platforms, and payment methods (e.g., direct deposit).

Best practices for creating an effective expense policy

Crafting a business expense policy that aligns with your company culture and goals is crucial. Follow these best practices:

1. Keep it clear and simple

Avoid jargon. Use plain language so employees can easily understand the policy. Provide examples for common scenarios, such as acceptable expenses during a business trip.

2. Tailor it to your business

Consider your industry and employee needs. For example, tech startups might prioritise software subscriptions, while consulting firms may focus on travel expense policies.

3. Consult employees

Engage both employees and senior management when drafting or updating the policy. Employees can offer insights into practical challenges, while leadership ensures alignment with financial goals.

4. Regular updates

Review the policy annually to reflect changes in company priorities, regulatory requirements, or spending patterns.

5. Make it accessible

Host the policy on your company intranet or internal platforms, and ensure it's included in onboarding materials for new hires.

How to communicate your expense policy to employees

Even the best expense management policies are ineffective if employees don’t understand them. Here’s how to promote awareness:

Host a Kickoff Meeting: Introduce the policy through a visual presentation, followed by a Q&A session.

Provide Training: Incorporate the policy into onboarding programs and periodic refreshers.

Use Reminders: Share updates or clarifications during team meetings or via email.

Simplify Access: Ensure employees can easily find the policy and relevant templates on the company intranet.

The role of technology in expense management

Implementing expense management software like Weel can take your expense policy to the next level. Here’s how:

1. Real-time visibility

With real-time tracking, employees and managers can monitor spending as it happens, improving transparency and compliance.

2. Automated approvals

Set custom rules and limits within the platform to automate approval processes, reducing delays and administrative burden.

3. Virtual corporate cards

Issue virtual cards for employees, tied to specific budgets and categories. This prevents unnecessary costs and ensures spending aligns with policy guidelines.

4. Streamlined expense claims

Employees can upload digital copies of itemized receipts directly into the platform, eliminating the hassle of managing paper receipts.

5. Enhanced reporting

Gain insights into spending patterns, identify opportunities for cost control, and flag excessive expenses or falsified claims with ease.

Simplify expense management with Weel

Managing expenses shouldn’t be a hassle—for employees or your finance team. With a leading expense management software like Weel, you can bring your expense policies to life and create a streamlined, efficient process that works for everyone. Here’s why businesses are turning to Weel for smarter expense management:

Virtual corporate cards

Empower your team while keeping spending under control. Weel’s virtual corporate cards come with customisable limits and real-time transaction tracking, so you can see where every dollar goes.

Tailored approval workflows

Eliminate bottlenecks with flexible workflows designed to fit your business. Whether it’s travel expenses, client entertainment, or office purchases, Weel lets you set approval paths that align with your expense policy.

Automated policy compliance

Forget the guesswork. Weel automatically enforces your corporate expense policy, flagging out-of-policy claims before they even reach your desk.

Seamless expense reconciliation

Sync expenses effortlessly with leading accounting platforms like Xero. Weel simplifies tracking, categorising, and reporting, saving hours of manual work for your finance team.

With Weel, you don’t just manage expenses—you transform them into a painless, efficient process. Ready to see how? Book a demo today and discover the Weel difference!

Get started with a free expense policy template

Developing a comprehensive policy doesn’t have to be overwhelming. Download our corporate card policy template to kickstart your journey. This ready-to-use document is designed to help businesses of all sizes outline their expense management process effectively.

Whether you’re looking to reduce administrative burden, improve cash flow, or achieve greater transparency in expense management, having a solid policy is the first step—and Weel can handle the rest.

The bottom line

A strong employee expense policy is essential for managing work-related expenses effectively. By defining expense categories, setting clear limits, and leveraging tools like Weel, businesses can optimise their expense management process, save time, and boost employee satisfaction.

Ready to transform your company’s approach to expense management? Book a demo with Weel today and experience the difference firsthand.