(In Finance Speak our T&E experts discuss questions & concerns from our customers and solutions to the problems. If you’d like to contribute or ask a question, send a message to firstname.lastname@example.org with ‘Finance Speak’ in the subject line.)
Executive (Anonymous) – We are in a bit of pain with the way our T&E policies are managed. We are dealing with a high level of non-compliance in several areas such as travel booking, alcohol related expenses, delayed reports etc. The breach is not just from employees but also Sr. Management. I have been tasked with cleaning this up but need some guiding points. I am interested in hearing how you have tackled this for other companies.
Gorilla – T&E Policies is one of the touchiest and broadest areas of business travel. Unfortunately there is no magic bullet fix. What works for one company might not work for another. But there are certain fundamental guiding notes. Of course, the first step starts with a clear identification of the problem followed by an actionable plan with defined metrics to compare against.
Here are some of the broad ideas we discussed complied for easy reading:
- Make sure the T&E policies are part of a business travel manual or ‘guide’. Make sure they are up to date. If you don’t have a T&E guide, then create one. Without this, you are running open-loop that cannot be controlled. We can help with guidance in this area
- In this manual clearly note what is allowed and what is not. No ambiguity here. Don’t leave anything to interpretation
- Make sure the manual is easily available to everyone including employees, approvers, travel agents, assistants and executives
- Make the manual concise, yet comprehensive. Break it down in several distinct areas so that readers know where to look instead of having to scan a 100 page document
- The manual must be signed by the highest authority – CFO or CEO or both
- Once generally accepted policies have been agreed upon, there must be zero-tolerance for anyone not adhering to the policies. Make sure this is clearly noted in the manual
- Delegate responsibility. The approvers must check the report to ensure that no policies were broken by employees. The travel agent must compare flight requests to policies before booking etc. Also the approvers must also be given the authority to question any area of the expense report
- The policies in the manual must apply to everybody – including executives
- Look into a corporate card program. It is best to sign up for a program where the employee must apply. This way, the card’s responsibility becomes the employee’s. This ensures lesser delays with card payments leading to lower late payment fines for the company
- Mandate the inclusion of receipts for every transaction – electronic or paper. While this won’t prevent fraud, it can act as a deterrent
- Make a note in the manual that says the company will not reimburse unauthorized expenses. Create a list of such expenses
- If the company is struggling with delays in submission, create a clause for timely submission. If this clause is broken, note the penalties. For example, penalties could be as simple as delaying reimbursement to the more complex withholding a certain percentage of reimbursement after multiple warnings
As you can see, there are many ways to skin this cat. Usually, it is a good idea to kick-start a process and fine-tune it along the way. For most companies, getting up to speed will take some time and there is no way around it.
Executive – How does your automated solution help manage this process?
Gorilla – Using our solution, you can set spending limits for various expense types. Questionable transactions get flagged in the application. You can create multi-level report approval that acts as a deterrent against policy infringement. With e-receipts, all transactions have supporting information. Our mobile app and credit card import module make it easy to submit expenses immediately after incurred thus reducing delays. We have other features that enhance T&E compliance.
After our conversation, our customer left with several ideas to implement and a better understanding of the challenges.
If you have any questions or comments, reach us at info AT gorillaexpense.com.