Employees can claim expenses in certain situations and depending on their role and nature of work. It is vital to have a clearly communicated and documented expenses policy and process so employees are aware of their duties and expense limit. Your employees are entitled to be reimbursed, as long as their spending falls within the policy.
In your employee handbook or induction process, explain the expense policy, the way to claim expense and who is eligible to claim those expenses. Several companies only allow expense claiming to sales and business development executives or public relations employees.
Your expenses policy must set out what spending is legitimate and what is not. It should describe what evidence employees need to show to support their claim, such as receipts, and whether they need approval or countersigning first. It is expected to have a person or department that handles these claims and keeps a record of expenses.
You are allowed to set limits, such as a maximum cost for hotel rooms, or whether inform your employees to use a company approved hotel chain or airline. Businesses can create a company account that can be used to book hotels, flights, or cars. You can also set limits on length of time before making a claim, so employees do not build up large expense claims over time.
Review these expenses every year or quarter, depending on the size of your business to understand your finances.
If you make changes to your expenses policy, you have to let your employees know in writing. You can also ask them for sign-off, to prove they have read and understood the changes.
By enforcing the expenses policy in practice, employees are less likely to make false claims.
Peninsula can advise you on writing and creating a watertight expenses policy. For peace of mind, please call our 24 hour Advice Line now on 1300 651 415.
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