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Your expense policy is hurting your team

Especially those who can least afford it.

Photo by Crawford Ifland on Unsplash

For most companies their expense policy is an afterthought.

It starts off informally.

“Spend as if it’s your own money”.

“Use your best judgement”.

“Check with me first”.

But over time things get more complicated. The team grows. The business gets more sophisticated. The cracks start to appear.

1. Different rules start apply to different people.

When you don’t have a formal expense policy it’s really easy to make one off exceptions.

Someone from the sales team asks if the company will pay for their personal mobile phone since they use it constantly to work with customers.

During the recruitment process a candidate reveals that their current company pays for their gym membership and they’d like that included in their employment offer.

An engineer wants to go to a technology conference out of state to brush up their skills and find out how other companies are working.

Each of these might get approved as a one off expense, an exception, but if they’re only approved for the people who ask you’re creating an inequitable workplace., one where the most vocal are given the most benefits instead of applying them evenly. This inequity not only breeds resentment but it strikes at the core of diversity and inclusion.

2. Opaque rules create a culture of gambling

Spending your own money as an employee and hoping to claim it back from your employer, especially where there are opaque expense policies, is the definition of gambling.

Not knowing if the purchase you’re making is within policy or not creates uncertainty and doubt. At best this slows your team down or prevents them from making a purchase which will make their job easier, at worst it leaves your team wearing the bill on something they genuinely thought was a corporate expense.

3. Employees get treated like a line of credit

Most traditional companies expect their employees to pay for anything they need on their own credit card and claim back a reimbursement later. The theory is that if an employee has to use their own money they’ll think twice before making the purchase.

The reality is this can put a huge strain on those who can least afford it. And no one should have to loan money to their employer.

I met with one senior sales director who has all the signs of success: nice clothes, a fancy car, and a resume at some of the fastest growing startups of recent years. But looks can be deceiving.

A divorce, the great financial crisis, alimony and bad credit meant that he was living paycheck to paycheck and had no way to front the money for the companies expense.

When he was tasked with visiting a client in New York he had to make an embarrassing admission to his boss: he couldn’t afford to pay for the flights and accommodation on his own and would need help.

Not everyone can afford to act as a line of credit to a business, to front thousands of dollars in travel, accommodation or any other expense and claim it back. And it’s not always clear who can and can’t.

Your expense policy might feel like something fairly standard, something you don’t need to invest too much time on. But it can have huge ramifications for those who can least afford it.

Creating a considered policy is an important step in creating a more diverse and inclusive workplace, where your people can be empowered to do their best work.

I started Spritz with the mission to help companies manage their spending, and create a more equitable workplace for everyone. I experienced all of these pain points running my own business and working for others, and knew there had to be a better way.

Spritz makes it easy for anyone to issue a corporate card to everyone on your team — from the intern to the CEO — and empower them to buy what they need to do their job, while staying within your expense policy. We do this by enshrining your expense policy within the spending limits of your card, and educating your team about what they can and can’t spend.

The product is live today and you can issue your first virtual or physical corporate card in less than five minutes at our website spritz.works.

We’re currently building a more equitable expense policy generator that can be used by anyone, whether or not you’re a customer of ours. If you’re open to being a part of the beta drop me a line at ned@spritz.works.

This post originally appeared here blog.spritz.works



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Ned Dwyer

Ned Dwyer

Australian in SF. Product manager & entrepreneur. Running & reading.