It’s an all too common lose-lose scenario. An employee goes on a business trip to meet with your most important clients or to close a deal with prospects. It’s a necessary trip, and one that delivers real value to your organization.

But the problems and frustrations pile up once your employee returns to the office. That’s because they used their personal credit card to book their travel and are too busy to search for all their paper receipts—a few of which, unbeknownst to them, violate the organization’s expense policies. It’s only when they submit their expense report a few months later that they’re frustrated by unwelcome news.

“You have to say, sorry, this is not reimbursable,” said Dan Skaggs, head of product at Elan Financial Services. “Now you have a messy, painful situation you have to figure out with your employee.” 

The mess extends to your accounting and finance department, who must manually process the paper receipts, yet are expected to provide real-time cash flow insights and forecast future financial performance.

“Manual approaches are very time consuming for the end user, approvers and finance folks that need to input everything into their ERP,” said Dan Duffy, director of sales at TravelBank. “Accounting teams need a minimum of 10 hours to reconcile employee expenses each month, and if they are doing it quicker, then they are cutting corners and forgoing the data needed for future budgeting and forecasting.”

Complexity breeds confusion.

Frustrated employees and a lack of visibility into company finances is obviously not the goal of any expense policy. But it’s exactly the result when your business makes these common mistakes:

Unnecessarily complex

For some companies, expense confusion and frustration bubbles up from the fact that no policy exists. But for many others, the problem is that the expense policy in place is needlessly complex and hard for employees to understand. “It needs to be as simple as possible,” Skaggs said. “A metric you can look at is how many pages the policy is. The fewer pages the better because then there is retention, and it is more consumable.”

Hard to find 

If your employees had to locate the organization’s expense policy, how many could find it quickly—or at all? An inaccessible expense policy is akin to having no policy at all. 

Rigid

One of the objectives of an expense policy is to contain costs while also investing in travel and other activities that will grow your business. Having a policy that doesn’t give employees some flexibility in their spending can be counterproductive, like when companies only allow employees to fly on one airline. 

“Allowing a threshold for airline tickets may allow an employee to take their preferred airline with status that will give them preferred seating, priority boarding and free baggage. On another airline, they may be stuck in the middle seat in the back of the plane by the bathroom,” Duffy said. “The difference between these tickets could be $50 to $75 but you will have a happier employee, a rested employee, and actually save money because free baggage and other perks are included.”

Limiting airline options for work travel can also translate into longer, more stressful trips. For example, mandating travel on one airline may increase the number of layovers on a trip, the likelihood of missing a trip and the total number of hours spent in airports. 

Lack of enforcement

Inconsistent enforcement of your company expense policy breeds employee resentment and dissatisfaction. But it can also be the natural result of an overly complex policy and insufficient training of both employees charging expenses and those enforcing the policy. Enforcement and training are made immeasurably more difficult when companies aren’t using a digital expense management platform. 

“If it's not built electronically, companies are going to struggle to train employees about the details of the expense policy and to enforce it,” Skaggs said. “But when you have a digital platform, it can actually do a lot of the training and the guidance for the finance staff.” 

Best practices for expense policy and implementation

Many of the solutions to common expense policy mistakes are simply to do the opposite of what is in place today. Instead of an overly long and complex expense policy, for example, emphasize simplicity and accessibility. In place of a rigid policy, give employees some flexibility. 

But improving the experience of employees both submitting expenses and those processing and approving them also depends on embracing new tools. For example, the Elan Financial Services Commercial Rewards Card is backed by a platform that removes the manual drudgery of expenses while automatically ensuring enforcement. 

“The platform is fully automated for expense management. It captures and reads receipts, auto matches transactions and provides fraud protection and policy enforcement,” Duffy said. “Expenses need to have all required fields before submission. When you have all this, you have the data you need to be sure that expenses comply with the policy. The platform also can gather insights from expenses, travel and credit cards to provide a complete snapshot of an entire month’s spend.”

A platform for efficiency and employee satisfaction

Having everything on a single platform means companies no longer must manage disparate systems to collect and process expense data or, even worse, have to track everything on spreadsheets.

Pairing the platform with the Commercial Rewards Card also enhances the rewards a business can earn by using the card. “Not only can you save time and eliminate frustration by using the platform, but your organization also gains access to rebates at lower spend thresholds than other commercial cards and without having to pay an annual fee,” said Courtney Wood, group product manager at Elan Financial Services.

Expense policy can either be a tool to help employees focus on their work and improve organizational efficiency or a drag on competitiveness. Reducing or eliminating the complexity, rigidity and unknowns of your current expense policy with an easy-to-use platform and generous card keeps companies and their employees focused on what matters.

To learn more about the advantages the Elan Commercial Rewards Card could bring to your business, connect with an Elan corporate payment solutions expert today.