It’s one thing to have an expense policy for employees, and it’s quite another to enforce it. There are a lot of barriers to effectively enforcing a company expense policy including a lack of clarity as to what the specifics of the policy actually are, a lack of centralized visibility or control, and the unwillingness of company leaders to put themselves in a difficult spot regarding enforcing something to employees.
If you have an expense management system but it’s not enforced, the consequences can go beyond the financial. It can bleed into your corporate culture and lead employees to do other things that are against policies. Non-compliance can be a huge issue for any business, but by not enforcing something like expense policies, you’re inadvertently saying that noncompliance is okay.
The following are some of the more effective ways to promote and enforce compliance with your employee expense policy.
Choose the Right Software
A lot of how to successfully enforce an expense policy can come down to choosing the right software. When you’re looking at expense management solutions, you want to think about a few big concepts.
First, it needs to offer robust centralized reporting and visibility. This allows you to actually identify if there are issues with compliance. You can view reports and visualizations to see if there are abnormalities that could indicate people aren’t following the rules, and of course, you can also automate a lot of the policy guidelines so that employees have no choice but to follow them.
Keep it Simple and Specific
If you have an expense policy with a lot of gray areas or it’s so complex that no one seems to understand it, you can’t necessarily blame employees for not adhering to it.
If you want to enforce it, you may need to go back and tweak it. Leave no room for lack of clarity. Make sure your policy is written, is specific and is easily available to employees. Then, at that point, if there are still transgressions it may be time to move on to consequences.
Enforce It Universally
When it comes to expense policies there tends to be a big problem, and that’s the fact that they’re not equally enforced. Company leaders may not be expected to adhere to any kind of standards when it comes to expenses, and yet other employees are held to very specific standards.
You need to have everyone following the same policies in your company, otherwise not only is there the potential for fraud, but you’re also breeding a sense of contempt among employees and cultivating a toxic culture. If you really want to promote change and enforce policies, everyone needs to be following it with no exceptions.
Finally, make it easier for employees. A lot of this can come from the software solution you choose. Sometimes your employees may simply be making mistakes or forgetting things, and it’s not intentional noncompliance. Choose a software platform with not only automated features but also options for employees to do things like submitting receipts on the go in real-time.