An expense policy template is a list of terms and conditions provided by an organization to their employees when they start working in a company. Every company has their characteristic expense policy which basically includes the list of purchases or expenditures made by the employees for which they will be reimbursed along with expenses that will not be supported by the company. This can include vacations, mobile expenses, food expenses and living facilities. The range of an expense policy depends on the financial status of the organization. The rich and well settled companies often provide the state of the art facilities to their employees, which they love to mention on their expense policies. Perhaps, the organizations who are struggling for existence and profit unfortunately, cannot offer such wide range of facilities to their employees.
Supported Expenses:
An expense policy template highlights all those expenses which are allowable or exempted expenses. These are the expenses which either directly paid for by the company or are reimbursed to the employees, upon sending reimbursement forms. All companies have a different definition of expense policies. As stated earlier, some companies provided a wider range of allowable expense and some don’t. Nevertheless, there are a few preliminary expenses that almost all companies provide to their employees, no matter what percentage of earning they are getting or how much the size of the organization is. Some of them are mentioned below:
• A free of cost vacation at least once a year.
• Living facilities.
• Medical facilities.
• Employee education fee.
• Transport/gas expenditures.
• Taxes.
• Labor costs.
The above-mentioned expenses are those which cannot be claimed or reimbursed. A lot of more expenses are also supported by most companies. An expense policy template can enable an organization to manage a broad space for adding or excluding certain expenses according to their feasibility.
Prohibited Expenses:
When it comes to expenses that are barren from a company’s policy, they are also clearly mentioned in the policy. The company does not take any of these expenses into consideration. Some of the most commonly prohibited expenses are as follows:
• Electronic expenses (purchasing mobiles, laptops and tablets).
• Personal travelling expenses.
• Alcohol or tobacco expenses.
• Home expenses.
Who Formulates An Expense Policy?
An expense policy template is being used to prepare it and usually, it is signed by the CEO or the manager of the company. It also has to approve by all the higher ups of the organization before putting it into operations. This policy is then officially published by the company’s publisher either in the monthly journals or in the annual report. While making an expense policy, it is the duty of concerned authorities to clearly mentioned all the allowed, forbidden, reimbursed, pre-paid expenses in coherent way. The policy should be updated often to meet the needs of the employees. The more facilities a company provides to its employees, the better and efficient, hardworking and ambitious employees it will score.
Advantages of An Expense Policy
Once an expense policy is confirmed, approved and published, it provides all necessary details to all the employees without any doubts or confusions. By reading the expense policy, employees will get a clear idea about all those expenses which are permissible and those which are not allowed to incur. This way, they don’t have to repeatedly bother their manager or CEO before making any purchase. Additionally, if the company has once and for all made this list, it can be helpful for management while preparing their company’s budget. They can easily estimate of how much money will be spent on each employee during a quarter or year. Expense policies help a newly hired employee to easily understand the rules and regulations of the company and get settled in more easily.
Template for Expense Policy
