Tax & admin 14 July 2017
Implementing a small business staff expense policy
?Out-of-pocket expenses should never be a headache for entrepreneurs. Here, Boris Bogaert, CEO of digital expense management firmxpenditure, guides readers through introducing a staff expense policy that is clear and works for all. you’ve got your business idea, secured some funding, and hired some great people. you’re wrapped up in the excitement of growing quickly and scaling up. But as your team begins to expand and you have to start meeting more and more investors and customers for business development purposes, what’s the absolute last thing you want to be dealing with? Expenses. it’s not long before the expenses start rolling in. Expenses are a tricky legal and moral minefield to negotiate and tough to strike the balance. They can easily become a source of friction between employees and founders of high-growth businesses. it’s all very well to want to come across as a chilled boss who lets staff run rampant with the company card every Friday night, but this isnt a sustainable way of management. On the other hand, deny your employees opportunities to use company funds and theyll begin to resent you. Defining and implementing an expense policy that works for everyone all the time is hard. If you havent prepared an effective expense management process, as a founder youll soon find yourself having to start forking out the cash from your own pocket. So, first thing’s first: let’s start with the basics. Definitions What exactly is a business expense? This is something you need to codify write it down on paper as soon as possible in order to be able to communicate it effectively to your employees. Essentially, an expense can be anything that benefits your business in terms of profits. This ranges from taking a trip to meet a client at their office, to the costs of buying printer paper. These kind of expenses are tax-deductible. Remember to look carefully at which expenses are tax-deductible commuting to and from work isnt tax deductible, but travelling out of office for business purposes is. Expenses can be necessary for the company if they provide a business benefit. it’s crucial that you make employees aware of exactly what they are allowed to expense. Encourage them to expense vital things but ensure they understand when they should look to save on expenses and when it’s appropriate to spend more. you’ve got to be reasonable with your expectations so your employees know that you trust them.