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How to set up a formal Travel and Entertainment expenses Policy

How to set up a formal Travel and Entertainment expenses Policy

Rachel King

Setting up a formal travel and entertainment (T and E) expenses policy is something that many businesses tend to place on the back burner.

It’s easy to understand why.

With many business managers focused on the day to day work of delivering products and support services, it can be tempting to leave the processes involved in claiming and reimbursing travel expenses to look after themselves. It’s not until a thorough audit reveals the amount of time and money which an inefficient approach to T and E expenses can cost a business that they need to instigate a formal policy becomes apparent.

By this time, of course, two damaging things have happened. The first is that a huge amount of budget may have already been wasted, either directly or through inefficient management of working hours. The second is that the inefficient practices and habits which have led to this waste have become ingrained in the habitual core operations of the business.

A look at the evidence

It’s quite simple to pull up statistics that support these claims, and which point to the inefficiency of standard travel expenses processes.

According to the Global Business Travel Association, a survey of businesses all over the world revealed that 19% of all expense reports contain errors and that correcting these errors costs almost as much in terms of time and money as processing the claim in the first place.

The Aberdeen Group – experts in data analytics and research – found that 57% of companies acknowledge the fact that they have a poor grasp of exactly how much their business and travel expenses are costing them.

In simple terms, a flood of claims, receipts, and expense forms is processed at the end of every month and it’s only at this point that any kind of picture of the expense landscape begins to appear, making it difficult – if not impossible – to take a strategic approach to expense policy.

Finally, a survey of UK companies found that two-thirds of employees had never read their company expense policy.

On the one hand, this last statistic may argue against setting up a formal policy, since, it suggests, most employees aren’t going to read it. On the other, it is precisely this laissez-faire attitude which makes the adoption of a formal expenses policy more vital than ever.     

Where to start

It might be tempting to deal with the issue in a piecemeal manner, revising the approach to expenses either one category or even one individual claim at a time, but any improvement brought about in this manner is likely to be painfully slow.

A far more effective approach is to devise and instigate a formal T and E expenses policy in a way that ensures buy-in from every part of the business.

Utilizing an expense management platform like Zetadocs Expenses renders this process quick and simple, as the heavy lifting of creating the framework of the T and E expenses policy has already been carried out.

Once Zetadocs Expenses is in place and being used across all departments of your business, the following building blocks will be an everyday part of your operational expense management processes.

Expenses Classified by Category

Calculating expenses as a single company-wide category makes it impossible to analyze by department or activity and thus identify where expenses are being incurred or wasted.

Zetadocs Expenses, on the other hand, allows you to create specific expense categories such as ‘subsistence’, ‘travel’ and ‘entertainment’. Managers can then analyze the expenses claimed under each different category. The numbers in each category can be broken down across a particular time frame, within a certain department or even with reference to an individual member of staff.

The rich analysis enabled by the use of categories, and their easy interpretation, enables managers to spot anomalies and to take action to address areas which are costing more in expenses than they should.     

Setting Limits

When expense claims are approved one at a time it can be difficult to keep track of how much a particular activity is costing.

Relying on the judgment of your finance team to keep claims within limits opens up the possibility of costs rising through either error or deliberate fraud.

Using Zetadocs Expenses makes it possible to set concrete limits for each specific type of expense, meaning that no claims which exceed those limits can be approved. 

Policing Approval

Many businesses face the issue of expense fraud, often driven by a casual approach to who can approve a claim.

Overclaiming on expenses and claiming for costs that fall outside normal expense policy, can come about because an approver is either a party to a fraud or too busy working on other matters to notice the discrepancy.

The reporting and approval processes that form part of Zetadocs offer two advantages. First, they create a detailed and accessible record of which claim has been approved and by whom, and secondly, they make it quick and simple to alert an approver if any problem has been spotted.

Google Maps

In the past, anyone wishing to claim more in expenses than was due might be tempted to do so by ramping up the number of miles driven over a particular period or for a certain journey.

With expenses paid on a ’per mile’ basis, a small addition of a few miles here and there could, over time, result in a significant extra expense.

Zetadocs closes this potential loophole by incorporating Google Maps into the system, technology which enables a fixed mileage to be set in advance of any trip and changes such as those caused by road works to be noted and incorporated.  

Regular Reporting

The sheer volume of data generated by multiple expense claims can make in-depth analysis difficult.

It is this analysis, however, which will help to uncover any long-term patterns in your expense profiles, enabling you to refine processes and, ultimately, save time and money.

The regular reports created by Zetadocs will perform exactly that role and can be created to parameters set by each individual business.

Set the timetable for report delivery as well as custom parameters for the information you want to be included, and you’ll derive a full picture of both the general expense trends of your business and the expense profile of individual sectors, departments, categories, and even individuals.

In summary

By using Zetadocs to set up your expense policy, expense management is no longer a burdensome overhead. Instead, it becomes a clear, simple and user-friendly process, capable of transforming the way you work daily, whilst at the same time enabling a strategic and long-term approach to the management of expenses across the business. Learn more about how Zetadocs can help you with your expense policy set up and management at

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