Why you need claim rules, and how to make them

From anniversary gifts to trade show attendance and office supplies, employees incur expenses for the benefit of your organisation. Useful? Yes! Error-prone? Most of the time, too. That's why every organisation needs expense reports. 
Situations differ, preferences change, guidelines and (unwritten) rules are not familiar to everyone.
As a result, some pay bills from petty cash, others borrow the business credit card and some employees advance themselves. The latter then want to see their money back. Reason enough to lay down in a claim regulation what employees may arrange, advance or purchase at the company's expense. 
Because colleagues who make their own cut then know exactly what you are reimbursing. And your finance team is never stuck with unclear or (too) high cost claims. So it's very clear.
In this article, we explain how to set up such a policy for declarations
Or download the free claim policy as a template for your claim procedure.  
❯  Expense allowance: keeping your spending under control
❯  Here's how to draw up claim rules
❯  Declaration regulations: best practices
❯  Better spending policy with SimpledCard

Declaration rules: keeping your spending under control

If everyone knows exactly what can be declared and under what conditions, you avoid a lot of hassle. 
Clear rules give colleagues something to hold on to and reduce the risk of discussions afterwards. A clear declaration process also prevents errors and allows your finance team to work more efficiently. 
That way, the monthly reports run a lot smoother and you get a grip on expenses. That saves a lot of headaches.

Here's how to draw up claim rules

You'll often find the same elements in successful claim rules. The most important requirement: define clearly and in detail. That way, you reduce the ‘grey area’ within which employees can make their own interpretation of rules and guidelines.
Reduce the risk of frustration? Explain clearly to employees:
❯ which claims you (do not) approve;
❯ how much budget is available;
❯ how employees should pay the costs;
❯ through which route they should submit their claims;
❯ when they can expect their refund.

1. Explain which claims you (do not) approve 

A hire car, maternity present or dinner with relations: communicate clearly which expenses employees can claim and under what conditions. 
You make it easier for yourself and your employees by categorising your expenses. Cluster different expense types under ‘travel’, ‘meals’, ‘software’ and ‘office supplies’, for example. 
It can also be useful to mention the exceptions: the expenses that employees cannot claim. Like a film on a short flight, or an hour's exercise at the hotel gym.

2. Make clear how much budget is available

You probably don't want employees opting for a five-course meal during the team outing. So be clear about how much budget can be spent per item at a time. That way, everyone in your organisation knows what limits they have to respect.  
Set realistic budgets so that employees can easily stick to them. To do so, check your spending patterns and financial resources. 
Also take into account the different needs of teams. A sales manager who often has lunch with customers will need different budgets than the receptionist or a project manager. 
By being clear about budgets, everyone knows exactly up to what maximum amounts they will get money back. 

3. Determine how employees should pay 

Want to streamline the claims process? Then you also need to take a critical look at payment options. 
Colleagues should be able to settle their expenses safely and efficiently. Therefore, offer them suitable payment methods. 
❯ Expenses during a trip - such as lunch and drinks - employees sometimes have to cover themselves advance. They will be refunded the money later.This has the advantage of making employees more conscious of their money. After all, it has to come out of their pockets. Moreover, it is nice for your organisation's cash flow

But there are also drawbacks. If employees have to advance amounts more often, it can become annoying for them.  

Another drawback: your finance team has less control over expenses. They only know what has been spent when the claim request comes in. 

You can also include business expenses advance to your employees. But that requires cash registers and bookkeeping. And that's not what your administration is waiting for! 

If you work with advance payments, it is very important to communicate your policy clearly. That way, employees know exactly what they can and cannot claim, and you avoid administrative chaos.  

❯ Many organisations ask their employees to book trips and hotels through pre-agreed platforms. The cost is then billed directly to the company.
Employees only need to provide a motivation with their claim.The downside is that platforms offer only one type of service or product. For other expenses, you still need additional payment methods. And that in turn creates additional administration.
❯ Prepaid debit cards are very convenient. You can have them automatically ‘topped up’ with a predetermined amount. This ensures that you never spend more than intended. In addition, you can use the cards for online payments and make sure your colleagues don't have to carry cash around. Nice and safe.
You easily integrate prepaid payment cards into your existing accounting system. This way, you always have insight into your expenses.

4. Explain the claim procedure 

Tell employees how to claim their expenses. Many companies do this manually. Employees submit receipts to the finance department, which then approves or rejects them. But those receipts are usually not enough. 
Often contributors need to add additional information. Why they made the expense, for example. Make it clear what other data is needed to make claims complete.
Make sure you explain your claim procedure well. At least tell: 
❯ what steps a claim consists of. How to deliver receipts and invoices, which form(s) fill in, etc. 
❯ what spending categories you use, and what additional steps, if any, are included. 
❯ where employees will find answers to frequently asked questions. This section can grow as you run into more things.  

5. Show how the chargeback works 

For your employees, the most important thing is to recover their business expenses. So make it clear how your organisation handles this. 
The approval process. Be clear about the steps employees need to take to get their request approved. You can work with different approval levels here. For example, based on the amount of expenses.  
An example:
❯ All expenses below €50 are ‘approved’ immediately in your claims system. A prerequisite is that the claims submitted are complete.
❯ Expenses between €50 and €500 go through a manager or cashier.
❯ Amounts above €500 should go to the managing director. Or even to the VP, if the amounts are unplanned. 
Deadlines. Establish the timeframe within which a claim must be submitted, and communicate how long it will take you to pay out. This way, employees know what they need to do themselves, and when they can expect the amounts to be in their accounts.
Lost your receipt? And what if someone can't find the receipt anymore? Many companies allow employees to create their own receipt, using a template. Do draw up clear rules for this. And determine who must sign for approval. 

Declaration regulations: best practices

When you draw up claim rules, a number of classic principles apply. We list them for you below.

Be fair 

Different employees should not be treated differently. Especially not if they work at the same salary level. So be consistent in applying your policies. 

Keep it simple

Just because you make ‘policy’ doesn't mean you suddenly have to do complicated legal stuff. Keep it understandable and concise.

Stay up-to-date

Times change, and so does your business. Your claims regulations need to grow with them. Policies and budgets that have not been updated in ten years are practically useless. So update your policies on time and adjust your budgets according to inflation. 
Also keep track of what is valid until when, and make sure everyone can easily find your current policy digitally. For example, in a fixed location on the intranet. 

Better spending policy with SimpledCard

With SimpledCard, you can provide employees with Business Mastercard and Maestro cards that are not linked to a bank. If they use the card, they can immediately scan the receipt in the app. And submit their claim. 
You can SimpledCard system easily adapt to your existing policies. Set which employee groups are allocated which budgets. And what type of expenses they can incur. Employees can see this for themselves directly in the app. So everyone knows exactly which expenses they can incur - and which they can't. 
Define roles to distribute different responsibilities. For example, appoint an administrator, who distributes SimpledCard passes. A cash manager, who determines budgets. And an accountant, who approves submitted claims. This way, you work according to the multi-eye principle. Without adding extra administration to your finance team. 
Our experts have worked at a variety of organisations. This allows us to help you properly draft appropriate claim regulations. And we can advise on implementation. This will help you keep things simple, and get a better grip on your expenses. 

Contact us about your claims policy

Wondering how to easily implement SimpledCard within your organisation, contributing to clear claim rules and giving your finance department a grip on expense management?
Our financial experts will be happy to work with you to see which solutions fit your organisation, wishes and ambitions.