Almost 68% of companies expect a considerable increase in travel budgets this year, as per the survey conducted by Morgan Stanley recently. However, while companies have increased their allocations to spend more as they return to full recovery after the unprecedented event in 2020, they also need help with their expense management system. 

In fact, with an increased budget for expenses, expense fraud is likely happening in organisations. 

The top challenges for companies in managing their expenses include, 

– Lack of spending visibility 

– Expense frauds 

– Complex employee reimbursements 

So, how do you overcome them? 

By incorporating a clear expense policy! Let’s understand in detail what an expense policy is, what you should include in it, and how to create one.

What is a Company Expense Policy?

An expense policy is a set of standards or rules that define how the company and its employees can spend money for business purposes. In simple terms, it sets rules on how to spend, what to spend, and how to reimburse when employees spend the employer’s money.

Download the expense policy template to start instantly with building a better expense management system.

What Do You Need to Include in Your Expense Policy?

The contents of the expense policy defer from company to company as different companies will have different sets of expenses. For example, for a manufacturing company, internet expenses will be an indirect expense, while for a software company, internet expenses will be a direct expense.

However, at minimum, every expense policy includes the following details:

Expense categories: Travel expenses, airfare, marketing expenses, etc.

Reimbursement process: How employees can claim the amount spent for business purposes 

Claim limits: If a company reimburses a partial amount for a particular expense

Dispute resolution process: if an employee wants to dispute a claim

5 Reasons Why You Need a Precise Expense Policy?

Having an approved expense policy for your organisation helps you save time and money in many ways since you have clearly stated rules that you and your employees need to follow in case of disputes. 

Let’s look at the five most significant reasons for having a clear expense policy:

1. It helps prevent expense fraud in organisations because you can have more control over employee spending through an expense policy.

2. It helps you streamline the expense reimbursement process since you have a documented step-by-step process. 

3. Employees will clearly understand the expense limits within which they can spend money for business purposes.

4. It helps build trust among employees and the company’s financial department. 

5. Disputing a claim becomes much easier due to a well-drafted expense policy.

How to Create an Expense Policy for Your business?

If you are creating your expense policy for the first time, these tips will help you get started.

1. Decide Categories to Include

Employees incur different expenses, from mobile phones and cars to hotel stays. Hence, it would be best if you defined which category of expenses you want to allow reimbursements to your employees. 

Below are the most common categories of expenses included in an expense policy:

– Transportation costs (airfare or train tickets)

– Fuel costs

– Marketing expenses

– Travel conveyance

– Hotel stay

Download the expense policy template to start instantly with building a better expense management system.

2. Define Precise Rules for Each Category

Understand where your employees will have to spend the most and make rules for each category clearly and fairly. For example, your business requires frequent travel from the sales team, and they must spend the most on networking. 

Then, allocate a decent amount as reimbursements for the marketing expenses. You may only need to spare a small amount for transportation costs if the client sponsors the local transportation. 

3. Consider Employees’ Expectations

Be reasonable with what employees expect from you when it comes to reimbursing their business expenses. When employees spend money from their pockets for your business, make sure they get reimbursed faster. 

Delays in reimbursements will make your employees unwilling to work for your organisation. Thus, be fair and consider their inputs for the expense policy.

4. Simplify the Processes

Ensure to simplify various processes, such as reimbursement applications, dispute claim processes, etc., as much as possible. For example, if your reimbursement process is cumbersome, it will affect the productivity of your employees since they will have to spend a lot of their time claiming their reimbursements. 

Employees prefer an easy-to-implement expense policy that is compact and understandable.

5. Ensure Compliance With Regulatory Requirements

While framing an expense policy, you will also have to consider the compliance requirements of the applicable laws and accounting principles. You also need to check the local labour laws to see if you have considered relevant provisions while framing the company reimbursement policy. 

6. Revise Whenever Necessary

It is crucial to regularly update, revise and reconsider various expense categories of the company. As the company grows, you must change the expense limits, add new categories, and remove old ones.

Automating the Expense Policy-Making Process

Today, using technologies like open APIs, artificial intelligence, and machine learning, you can use automated expense management solutions that will help you create a robust expense policy and manage your expenses more efficiently. 

From faster employee reimbursements to better control over employee spending, automated expense management tools help you build a seamless expense management system. 

Book a demo to show you how to build an expense management system through the Xpence platform. 

Whether you are a small business owner or a freelancer managing multiple clients’ work single-handedly, you face many challenges while managing your business expenses. In fact, invoicing multiple customers and following up on the payment is a huge task.

However, it is incomplete if you haven’t done proper bookkeeping. Thus, expense management, invoicing, and bookkeeping are interconnected and depend on each other to some extent.

But how can you streamline the process of managing business expenses, timely invoicing and follow-up, and smart bookkeeping, all at once?

Xpence has multiple solutions and products that will cater to your needs of managing your spending, payments, and accounting procedures, everything in one mobile application on your phone.

Let’s explore Xpence’s offerings and how they can bring peace of mind while managing your business finances.

What Xpence Has for You?

From managing timely payments to controlling employee spending efficiently, Xpence has smart solutions for simplifying your business finances.

Corporate Cards

Xpence can issue smart Visa prepaid cards, physical or virtual, for your business payments and receipts. You can provide these cards to your employees for their business expenses.

Physical Cards

Xpence enables you to issue physical Visa cards to your employees and for your business to easily track and manage your spending. These cards can be topped up from your company bank accounts.

Virtual Cards

Xpence can also issue virtual cards, similar to physical cards without physical presence. You can send/receive payments through a virtual card stored in an app on your phone.

The app also allows you to manage your employees’ physical/virtual card settings by setting spending limits and tracking each spending in real-time.

Smart Bookkeeping

Xpence can help you categorise your expenses and payments and update them in real-time to record the accounting entries. The innovative feature of the Xpence app will let you automatically record your transactions and get instant reports.

Easy Invoicing

Xpence also offers invoicing solutions for busy owners and freelancers. The invoicing tool lets you send customised and beautiful invoices to your clients within minutes. The invoicing tool enables you to follow up quickly on your payments and track your expenses in real time.

Petty Cash Management

Xpence offers expense management solutions to manage your petty cash expenses efficiently. It provides digitised solutions to manage expenses as a team, track and update in real time, and control them by setting limits.

Thus, Xpence offers a complete solution to manage your business expenses. Let’s see what types of solutions Xpence has for you.

4 Types of Comprehensive Xpence Solutions for Your Business 

Xpence offers customised solutions for freelancers, startup founders, corporate CEOs, and small business owners.

Corporates 

Xpence offers corporate cards for your employees. You can manage your employees’ spending by tracking them in real-time.

SMEs

Xpence provides virtual/physical cards, automated bookkeeping, and invoicing solutions for small business owners.

It helps you streamline petty cash expenses and digitize your business finance management.

Startups

Xpence provides instant virtual cards to the founders and their employees to manage their expenses efficiently.

It also helps busy founders manage their petty cash expenses and automate their bookkeeping procedures.

Freelancers

Xpence provides invoicing solutions to freelancers to issue customized invoices. It enables you to get paid faster by managing your invoices.

Thus, whether you are a startup founder, a freelancer, a small business owner, or a corporate executive, Xpence caters to everyone’s need to manage business expenses. Let’s see why Xpence products and solutions can give you peace of mind.

 

Why Should You Use Xpence for Your Business?

Below are the reasons you should use Xpence and have peace of mind about business expenses.

– It is simple to use and more convenient for managing expenses.

– Your transactions and information are safe as we follow industry-leading security standards.

– The cards provided by Xpence have global acceptance. Hence, you can use them anywhere in the world.

– You can provide real-time approvals for your employees’ expenses so they get reimbursed quickly.

– offers easy control of the card spend limits through the card settings option on your phone app.

– You can send instant team invites to your team members and employees to issue cards and track their expenses.

– The smart bookkeeping feature automatically categorizes your expenses and records them under an appropriate heading.

Thus, using Xpence is simple and secure, giving you peace of mind while managing your business expenses.

When you give traditional corporate cards to your employees to use for business purposes, expense management becomes a tedious task. Managing business spending was cumbersome, from expense approval and recording accounting entries to reconciling payment transactions.

Virtual cards can do much more than manage your business spending. It does everything from one-tap issuance to invoice management and transaction reconciliation for you!

Let’s see what these virtual cards are, how they work, and their benefits for businesses.

What are Virtual Cards?

A virtual card is an electronic card with a 16-digit card number, a CVV, and an expiration date. It is everything a regular corporate debit card can do but without a physical form.

However, these virtual cards are more than just your regular debit cards. Other integrated features include expense control, real-time tracking facilities, fraud protection, etc.

Thus, virtual debit cards are taking over the small business world as they make it incredibly smooth to manage business expenses. Let’s see how they do it by understanding how virtual cards work.

Fact: According to recent research, the total value of B2B virtual card transactions will be over $6 trillion by 2026 globally.

How Do Virtual Cards Work?

An employer needs to issue a virtual expense card to the employee. The employee will receive it on his mobile through an app. And he can use it to make payments for business, such as travel, software subscriptions, food, or any other business expense.

Employers can set card transaction limits for their employees, and they will be notified upon each transaction, and the transactions will be recorded in the integrated accounting system. Therefore, virtual cards do more than facilitate online or in-store payments by offering multiple functionalities with one tap.

Let’s see how these virtual cards can streamline your business spending.

How Can Virtual Cards Make Your Business Spending Easier?

Businesses have seen a massive spurt in virtual cards in the UAE since consumers started shifting towards adopting digital payment methods. So let’s see how virtual cards change how businesses manage their expenses.

Instant Issuance

Virtual cards are electronic cards without physical presence; hence, they are issued with just one click. Therefore, once you have done all the KYC procedures correctly, you can give virtual cards to the employees with just one tap.

Real-time Expense Tracking

As an employer, you would want to receive live notifications of how much your employees spend. So they offer real-time expense tracking, and you also get to see the bill with all the details of the expense incurred.

Automated Bookkeeping

The bookkeeping feature will automatically record an accounting entry once the employee has made a transaction. It will categorize the expense under a relevant accounting head using pre-filled algorithms.

Fraud Prevention

Virtual card transactions are safe and secured since they use a 16-digit unique number. The cards also have permission settings where you can set limits for each card. This way, you can restrict the cardholders from approving their purchases.

Employee Spending Control

You can control your employees’ expenses by setting limits to various actions on the virtual cards and, for example, limiting their daily spending, putting controls for each category of expenses, etc.

Effective AP Automation

You can also manage your accounts’ payables with the card’s AP automation feature. Not all virtual cards offer this feature. However, some allow you to integrate your card transactions smoothly with your company’s accounting system.

The card transactions can easily get converted into accounting entries with valid documentation. You can also manage your accounts’ payables since your transactions are integrated with the accounting system.

Card Freeze Facility

You can immediately freeze the virtual card facility for any employees you think no longer require a virtual company card. In addition, the card freeze feature allows you to restrict an employee from using your company debit card smoothly.

Thus, expense management for your business becomes so easily accessible that it offers you control management for your spending. Want to know how you can simplify your business spending?

Let’s see how you can stay on top of your business expense management.

How to Simplify Your Business Expenses?

Xpence Visa virtual cards allow you to manage your business expenses by issuing virtual cards with just a single tap. You can enjoy multiple benefits, such as

– Automated expenses

– Spending rules and controls

– Simplified bookkeeping

– Globally accepted