Why you need spending policies in your company
Every company needs an expense policy that is understood by all and sundry in the organization. Everyone from the most junior to the most senior employee needs to learn the policy by heart so as to avoid cases of accidental spending or cases where an employee expects to be reimbursed money spent against the company rules.
Having such a policy enhances a sense of responsibility for company spend among everyone.
At the same time, it helps cut down some over-ambitious expectations that new employees might have. You do not want your greenhorns going overboard with their financial demands or spending too much than the company can afford, do you?
At the same time, you do not want your work to stall simply because your new employees feared spending on something that they thought would not be covered by the company finance, right?
As a c-suite executive, you also do not want your company going under after it was bankrupted by some wasteful employees who were spending the company money on some exorbitant products or services.
Needless to say, financial responsibility and taking up austerity measures is key from day one of the organization. Everyone needs to know how much is too much so that they do not go overboard.
An expense policy helps manage expectations of your employees since they know from day one, what to ask for and what not to think of. Their expectations therefore are well managed from the start of their work at your company.
Having a clear financial spending policy also helps remove squabbles among your employees. Battles between the finance and the operations teams are as old as history. While the operations team wants money to spend, the finance department has been tainted as a bottle-necker that is always hell-bent on stopping the operations team from getting funds to continue their operations. This creates bad blood between the two teams.
With an expense policy clearly set out though, you will not have any of this. The operations team knows well what to spend money on and so will not approach the finance department with a budget whose items are way out of their reach.
A good way to ensure that your expense policies are adhered to is by using spend control platforms such as boya. Boya is a platform that is able to manage your company spend while tracking every expense made and recording it in real-time so that your finance department is notified every time an employee uses the company money. Boya makes it easy for everyone in the company to do the right thing seamlessly. With Boya, the accountants will not have to worry about spending long hours reconciling the expenses at the end of every month since boya will have solved a huge chunk of this.