Create your own expense policy in minutes with Pleo

An expense policy, if it’s done right, can be one of the most important documents in any business.

But it can feel daunting to start one from scratch. Especially if you’ve got plenty on your plate already.

So, we’ve built an Expense Policy Builder that will help you quickly draw up spending guidelines that are tailored to your business.

But if you want a little advice on how to sculpt the perfect expense policy, keep reading.

What is an expense policy?

No matter the size of your business, at some point, your team will have to buy things for work.

Whether it’s for a meeting, a conference, a training event, an online tool or just something for the office, the people you employ will have to make a decision on what's OK to spend for the good of the company.

As the business grows, this becomes harder to handle. Unless you want to drive a culture of complete trust and transparency at scale like Netflix, having a watertight expense policy can move from a 'nice-to-have' to an essential.

It's not just suggested amounts, but also potentially preferred payment methods or providers.

A typical policy might include things like the recommended hotel budget per night. Or details on what kind of gifts are OK. Or if your team have to pay for any parking fines they pick up on business journeys.

But create a policy that works well and you’ll steer good habits, prevent friction and vitally, save money.

Why your team needs a policy

Control spending

One obvious point of expense policies is that they make clear the highest amount that people are permitted to spend on something.

This isn’t just useful for the big spenders on your team, but for everyone – a suggested amount can serve as a really useful benchmark for people when they’re trying to book something like a hotel or purchase a laptop.

Get everyone on the same page

If they’re not managed correctly, expenses can cause real friction and a sense of unfairness and dissatisfaction. A company-wide policy can be a great step in establishing the ground rules for everyone, from the Managing Director down.

And if it’s fair, there will be less temptation to break the rules. Of course Pleo can help with that transparency thanks to our spending limits and insights, but that's for another day.

Plan for the future

When you know what people should be spending, it’s easier for finance teams and managers to forecast budgets. Reviewing what people are actually spending against the policy can also indicate areas where money can be saved.

If you’re telling everyone that £15 per breakfast is fine but nobody spends more than £5, you can look at updating your policy.

Reduce the risk of fraud

Business expense fraud might not be the most comfortable subject to talk about, but it matters. It costs British businesses around £2bn a year according to recent estimates.

An expense policy doesn’t just set out the ground rules of spending, it means your team can be held accountable if they go against those rules.

How to write a great expense policy

Our policy builder can help with a lot of these points, but it’s definitely worth taking a look before you dive in.

Keep it concise. This is a document for everyone, not just your finance team or senior managers. So it needs to be something people can quickly reference.

Get input from your team. You don’t need to do a company-wide survey (although it might be fun!), but it is a good idea to get as much buy-in from people as possible. Run some of the key numbers past those in your company who can influence others (like team leads) – does £80 a night for hotel stays sound good to your senior managers?

Don’t be too strict. No need to specify the punishments for anyone who goes against the policy. In simple, plain language, layout the guidelines. In the rare case where someone acts outside of policy, you can decide the best course of action.

Make sure the policy stays relevant. If spending habits change (say because your company expands into a new market or you change suppliers), update the policy accordingly.

Accessibility is key. Old-fashioned expense policies were printed out once and then gathered dust on a shelf somewhere. These days, you want to make sure the policy is saved somewhere online that can be bookmarked and referenced in a second – by anyone who needs it.

What you’ll find in the Pleo Expense Policy Builder

Accommodation

Travelling for work is vital for many businesses – but how much are you happy for people to spend? Should they book with price comparison websites? Is there a hotel chain you prefer them to use? Or maybe Airbnb is the best option?

Food

Is breakfast, lunch and dinner covered by company money? If so, how much is allocated to each meal? Don’t forget the sometimes awkward questions of who pays (the most senior person is a common rule) and how much you can tip (... please do tip though).

Transport

We’re not just talking mileage, although that’s a vital part of an expense policy for many companies. The transport section of the policy builder also covers rules around flights, taxis and public transport.

Conferences & Events

The first step for your conference spending policy is probably going to be deciding how much each person can spend on tickets per year or even per event. Of course prices for these tickets can change, so it can be a good idea to set a price range here.

Remote work

The data shows just how much business spending in recent times has focused on remote work set-ups. It’s not just the hardware that your WFH army need, it’s ergonomic furniture, decent lighting and software to help them collaborate better.

Gifts and flowers

Keeping clients and team members sweet is always a good use of your money – but how much is the right amount to spend each year? And what about presents for your own team, when they hit a life milestone… or when you just want to show them you care?

Now that you know what it takes to build a great expense policy, you’re probably itching to create one.

Click the link above and in just a few minutes, you'll have set your team spending guidelines that will keep everyone on the right track.