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Every organisation needs an expense claim policy, including yours. This policy outlines the expenses your employees and contractors can and cannot make reimbursement claims for while working.
Find out how you can easily set up this policy with an expense claim policy template.
What's in this guide?
- What is an expense claim policy?
- When should I use an expense claim policy?
- What does an expense claim policy include?
- What are reimbursable expenses?
- What are non-reimbursable expenses?
- What not to include in an expense claim policy
- How effective is an expense claim policy?
- Do I need a lawyer for an expense claim policy?
- Get access to customisable expense claim policy templates online
- How do I write an expense claim policy?
- Where to get free legal documents and templates like an expense claim policy
What is an expense claim policy?
An expense claim policy is a document that sets out a company's internal policy for employee reimbursements. It sets a standard for what qualifies as a reimbursable expense and what does not qualify.
Employees incur expenses in most types of businesses. These may be related to travel, entertainment, business or something else. Companies either pay for these directly, for example with a company credit card, or have their employees pay for them individually and later claim reimbursement. An expense claim policy sets up the company's policy and procedure for employee reimbursements.
Download this expense claim policy template at Lawpath
When should I use an expense claim policy?
You need an expense claim policy if your employees incur business expenses and claim reimbursement. You should have one in place and introduce employees to it when they start working for you. Human resources and finance teams can also help them understand its various components.
Use an expense claims policy to distinguish between reimbursable and non-reimbursable expenses as well as to set standard processes for claiming, approving and paying reimbursements.
What does an expense claim policy include?
An expense claim policy should include:
- A date the policy came/comes into force
- A list of reimbursable expenses
- A list of non-reimbursable expenses
- Relevant provisions, which include guidelines for converting foreign currency-incurred expenses into Australian dollars and proving expenses using receipts and valid tax invoices.
- The procedure for filing claims
- The procedure for approving and paying reimbursements
What are reimbursable expenses?
Reimbursable expenses are those that employees are able to claim and receive money back for. These usually include travel, food and entertainment expenses incurred while on official duty. They also include home office supplies.
Travel expenses include flight tickets, taxi fares and hotel accommodations. You can set certain standards in your policy to require employees going on business trips to use a specific carrier or fly economy. You're also able to create rules around when employees can claim taxis home after working late.
Another common type of expense that might come up is food. These expenses include meals that employees have while on business travel, restaurant meals they have with the clients and meals for employees who stay late at the office.
Entertainment expenses are those incurred by employees in the course of pursuing new business. Home office supplies relate to business equipment employees need to complete their work assignments offsite.
What are non-reimbursable expenses?
You can establish what you consider to be a non-reimbursable effect in your expense claim policy. Some examples might be:
- Flight tickets for family or friends accompanying an employee on a business trip
- Accommodation extras like spa treatments and in-house movies
- Leisure activities such as theater visits
- Payment of fines or penalties
- Goods and services from a non-preferred supplier.
Your list of non-reimbursable expenses won't be extensive, so give your HR team some criteria to work out which expenses are claimable.
What not to include in an expense claim policy
Do not include vague descriptions in your expense claim policy. For example, saying "reasonable expenses" is not clear enough. Write down the expenses you will reimburse, those you will not and the limits for reimbursable expenses.
How effective is an expense claim policy?
Setting up an expense claim policy will help reduce instances where employees try to claim something that shouldn't be approved. When there is a clear set of rules it's easy for employees to follow it.
Your finance team will also know which claims to pay and which ones not to. You can also limit your legal liability for unlawful reimbursements.
Do I need a lawyer for an expense claim policy?
You do not need a lawyer to create an expense claim policy. You can download an expense claim policy template from a credible online source, like the ones below, and tailor it to your company's needs.
Get access to customisable expense claim policy templates online
Does your company belong in this list?
How do I write an expense claim policy?
To write a good expense claim policy, you can download a template from a credible online source. Fill in the details of your company and list the claims expenses they can and cannot claim. Be clear and definite in your wording and do not leave anything to interpretation. Gray areas in the scope of your policy will lead to conflicting interpretations which might lead to you needing to claim items that shouldn't be.
Once you've set out the claims employees can and can't make, outline the procedure for claiming them. Give a deadline for filing the claims.
Next, describe the documents that employees should produce to back their claims (receipts and valid tax invoices) and identify the departments that should handle claims. You should also state how verified claims will be paid.
Where to get free legal documents and templates like an expense claim policy
Here are the websites where you can access free expense claim policy templates:
- Wonder Legal. This site is an expansive depository of legal documents. Some, including expense claim policy templates, are free. You can download them without paying a fee. Others are only accessible after you pay fees.
- SAP Concur. The platform offers Australian businesses tools to streamline their travel and invoice management. Register to get a free expense claim policy template.
- Lawpath. This site offers legal document templates for a monthly fee of $79. You can get one free template.
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