Navigating Financial Waters: Our Guide to Crafting an Airtight T&E Policy

Understanding T&E:

Let's start by unravelling the essence of T&E – a significant expenditure for businesses involving travel and expense costs. These expenses, encompassing everything from business trips to client meetings, demand a strategic approach to ensure prudent financial management.

When drafting a T&E policy, it is important to conduct a thorough assessment of your company’s requirements when it comes to travel and expenses. Consider the nature of your business, the frequency of travel, and the specific needs of your employees. Identify key stakeholders, such as finance, human resources, and department heads, to gather insights and ensure a holistic approach.

The T&E Policy Blueprint:

To ensure financial prudence, we advocate for the creation of a robust T&E policy. This document serves as a set of guidelines for employees, delineating eligible travel expenses and the procedures for reporting and approval.

Let us break down the essential components of an effective T&E policy:

Reimbursement Procedure:

Document what is an expense that can be reimbursed or should be charged directly on a company card. Specify the timeline for processing reimbursements and the method of disbursement. Clear expectations and timely payments contribute to financial transparency.

Define Your Policy’s Objective:

Clearly outline the objectives of your T&E policy. These may include controlling costs, ensuring compliance with tax regulations, promoting employee safety, and fostering responsible spending. Understanding the overarching goals will guide the development of specific policies within the document. When objectives aren’t clearly set out, it can cause more confusion and can create more admin.

Expense Categories:

Distinguish and explain various eligible expense categories, including transportation, lodging, meals, and entertainment. Providing clear definitions helps prevent excessive spending and ensures clarity for our staff.

Approval Process:

Detail the process for submitting expenses, including required forms and supporting documentation. An automated approval system, powered by financial platforms like Numarqe, ensures efficiency in tracking and approvals.

T&E Policy Best Practices:

1.     Consult with Management and the Wider Team:

Working with different teams will ensure that a best practice T&E policy is correctly implemented. By involving different teams such as HR, legal, finance team and compliance teams will create a foundation that will align with existing company policies.

2.     Benchmark T&E Costs:

Reviewing T&E costs and comparing those across different locations within your business will provide insight into reasonable and expected costs across different geographies, budgets and expense categories.

3.     Review Tax Implications:

Address issues such as tax implications for employees, compliance with local laws, and any industry-specific regulations. Regularly review and update your policy to stay current with changing regulations. See third party advice if necessary to provide further comfort that your policies don’t have a negative tax implication.

4.     Optimise for Tax Deductions:

Align the policy with HMRC guidelines to ensure tax-deductible expenses. Check out the HMRC guidelines for expenses and reimbursements here.

Here are some insights for a smooth T&E policy implementation:

1.     Create a Communication Plan: Disseminate the policy through management announcements i.e. emails, or other channels to ensure awareness. Conduct training sessions or provide written materials to ensure that everyone understands the guidelines and procedures. Regularly update employees on any policy changes and make the information easily accessible.

2.     Speak To Employees and Collect Feedback Early: Gather feedback early in the implementation process to identify areas for improvement and ensure adherence to procedures.

      

3.     Introduce Company Cards: Simultaneously implementing corporate cards streamlines the process, offering control over spending and category limits.

      

4.     Evolve and Improve: Encourage feedback from employees who regularly travel or incur expenses. Use their input to identify areas for improvement and adjust the policy accordingly. A T&E policy is a dynamic document that should evolve with the changing needs and dynamics of your organisation.

 

How to streamline with Numarqe:

We introduce Numarqe's corporate cards and working capital platform as the ultimate tool to streamline T&E expenses. We can empower employees with their own Numarqe cards and ensure duty of care with visibility into every employee's trip.