How to Say No to Expenses (In a Nice Way)


Finance Insights for ProfessionalsThe latest thought leadership for Finance pros

Thursday, March 15, 2018

Employee expenses can soon add up. Saying no can risk employee morale and loyalty so how do you balance your company's finances with retention goals?

Article 3 Minutes
How to Say No to Expenses (In a Nice Way)

Employee expenses can be a headache for any finance department. Stuck between a rock and a hard place, you don't want to jeopardize morale by unfairly saying no, but accepting too many could put the company's cash flow at risk.

So how do you say no to employee expenses without upsetting the status quo and potentially affecting retention levels?

Err on the side of caution with your policy

It's much more straightforward to reject an employee expense claim if it doesn't meet the requirements of your official company policy. This means it can be wise to have a stricter set of rules, from which you can use your own discretion and judgment when it comes to processing expenses, than to have a more lenient expenses policy.

You should also check the government guidelines on what can be legally expensed as this can give you an idea of what payments you should be accepting as a matter of course, and which you'll need to decide on a case-by-case basis. As well as helping to strengthen your case for refusing expenses, ensuring your policy is in line with government recommendations will also impact whether or not you will be taxed on it.

Total transparency

A clear, strict and fair policy means employees are in no doubt about what can and can't be put through as a business expense. It leaves little room for interpretation so you and the workforce both understand what's acceptable and what isn't. Drawing up such a policy will also save you time in the long run as it means you don't have to justify yourself every time an employee's expense claim is rejected.

Having a good expenses policy also takes any personal feelings out of the equation. As long as you are consistent with your approach, employees shouldn't feel as though they are being singled out or treated unfairly. This should make rejected inappropriate expenses forms more straightforward for both you and the individual involved.

Digital expenses

Many companies now choose for expenses to be sent to the finance department electronically. Of course, you can also keep a hard copy of the actual documents on file but these can be sent additionally. Not only does this ensure there is a 'paper trail' should there be any dispute about when a claim was filed, but it gives you an easy way to respond to employees. You can simply send them a standard email explaining that their claim doesn't meet the company's policy. This saves any embarrassing or awkward face-to-face interactions for them and allows you another level of consistency.

If people have to wait months or even weeks for a claim to be paid or even looked into, individuals are likely to forget what they have expensed and so are the finance department. Paying people promptly will allow for more clarity and enable finance professionals to make better judgements on whether the claim is appropriate.

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