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How do I Write an Expense Reimbursement Policy?

Felicia Dye
Felicia Dye

An expense reimbursement policy can be an important document and therefore requires planning and clarity. It should include the types of expenses that will be reimbursed and those that will not. You should specify who the policy pertains to and any individuals whose expenses are excluded. Maximum reimbursements should be outlined, and it should be made clear which documentation is needed for repayment. The time frame for submitting documentation should be included along with time frame and manner in which reimbursements will be made.

If you have the responsibility of writing an expense reimbursement policy, do so very carefully. Careless mistakes could be costly for your company or for individuals who have made expenditures with the expectation of being repaid. This is why it is of the utmost importance that the terms be clear for everyone, including you.

Businessman with a briefcase
Businessman with a briefcase

To begin with, you should produce a list that outlines which expenses are reimbursable and which are not. This exercise will help you to streamline your expense reimbursement policy. You may not be able to list all eligible and ineligible items in the final document, but the information that you do provide should leave little question of which category most expenses will fall into.

Near the beginning of the reimbursement policy you should outline to whom it pertains. There may be certain types of expense reimbursements that you wish to make available only to certain individuals. For example, senior management may qualify for repayment of costs for dining with clients and entertaining them, but you may wish to restrict their assistants to reimbursements for meals only. Situations such as this can be effectively handled in one of two ways. You can either specifically state whom each part of the policy does and does not pertain to, or you can organize the document into sections that specifically apply to each group.

Maximum costs for specific types of expenses need to be addressed. If this is not done, the result is likely to be a great deal of confusion and perhaps substantial financial losses. In the event that maximums need to fluctuate in certain circumstances, the manner in which this will be handled should be outlined. For example, you may set a maximum daily expense reimbursement for business trips, but the amount may need to be increased when traveling to certain international cities.

It is very important for the expense reimbursement policy to explicitly state what sort of documentation or proof is needed for costs to be eligible. You may simply want receipts, or you may want receipts with detailed information such as the client that the cost pertained to and why the costs were necessary. You may want all expenses submitted on a special form. Whatever your decision, make sure this information is clearly communicated.

Furthermore, you need to specify the deadlines or regularity for submitting expenses for reimbursement. The policy should communicate what will happen if this time frame is not respected. Individuals should also be made aware of when and how they will be reimbursed.

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      Businessman with a briefcase