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The telecoms giant Vodafone raised a few eyebrows this year when its rather parsimonious expenses policy was exposed.
It was company policy that lunches were almost never expensable and breakfasts were only allowable for overnight stays. Evening meals, Vodafone’s 12 page policy explains, can only be claimed if employees “are on duty for 10 hours or more in the day and due to arrive home after 8.00pm”.
It led to Vodafone being criticised for a lack of empathy with its workers. The Register, who broke the story, spoke to sources who spoke of long business trips within the UK where only travel and mileage was an allowed expense.
It’s a blockbuster example, of course, so it makes sense that it drew media attention. But while Vodafone went a little too deep in its belt tightening ways, the company was right to draw clear lines in the sand, according to Ian Smith, the financial director and general manager of the payroll provider Invu.
Having clear rules are vital, he says, since things really go south when employees don’t know where they stand. Most business owners will have at least one funny expenses story. A recent entertaining thread on UKBF’s sister site AccountingWEB uncovered some absolute diamonds.
It’s funny to hear these stories, but the joke ends when the business ends up footing the bill. It’s at these times when rules make sense. They don’t need to be quite as Dickensian as Vodafone’s either, but they need to be formalised.
A prime example is from that same AccountingWEB thread: one user describes employees trying to expense pricey wines, but “we were strict half a bottle of house plonk per head kind of a set up”.
It’s about common sense. As Invu’s Smith explains: “You don’t want to create a system that demotivates staff or disincentives them to book in travel and meetings, particularly if for some staff that’s the best way to generate new business, for example.”
But if you have sensible rules in place, which set clear limits while also encouraging employees to get out there, you’ll unlock a new challenge: tracking expenses and all the admin that goes with it.
Pen and paper used to be the only option, Excel is a classic, too. Some UKBFers are in favour of the old school or, in the case of The Byre, freeware. But it’s certainly worth looking at which commercial providers there are.
Of course, any commercial supplier should slot into your pre-existing, clearly defined expenses policy. When it’s done like this, the technology, features and automation of a major provider could come in handy.
Many come with pre-paid cards partnered with an app, eliminating archaic ideas like petty cash and allowing flexibility in case of emergencies. The new generation also reconcile expenses as they’re spent. A nifty feature as the era of digital taxation looms.
How about you? Do you have a clear expenses policy? And would you consider implementing a major expenses provider in your workplace?
And a bonus round: What’s the funniest/worst expenses claim you’ve seen?
Struggling to keep track of expenses claims? Take control of your business spending with Soldo. With Soldo, you can help employees stay on top of their spending, set bespoke budgets and effortlessly generate reports that integrate with all the major accounting systems. Visit Soldo today to find out more.