Premier Guarantee is one of the UK's leading structural warranty providers. The company offers a range of warranties for new homes, commercial buildings and completed housing, plus related services such as energy performance assessments. David Connolly, financial controller, explains here how the company manages the expense claims made by its 120 employees.
What I did
Put policies and procedures in place
"When the company began working towards ISO 9001 accreditation, we undertook a thorough review of existing policies and procedures, including expenses management.
"We identified areas for improvement, such as streamlining documents, introducing preferred supplier schemes and gathering information into a single expenses manual. Having preferred suppliers makes it easier to manage certain expenses. For example our preferred hotel chain issues employees with their own expenses card to charge hotel bills to. We then receive a single monthly statement from the company.
"Employees use personal credit cards for smaller expenses and claim them back. We pay expenses monthly, within a week of them being submitted wherever possible. This ensures that employees are reimbursed in time to pay off their personal credit card bills. Where an employee is likely to incur large expenses, for example overseas travel, we ask suppliers to send an invoice direct to us where possible, so that the employee doesn't have to stump up too much of their own cash.
"Obviously good record-keeping is essential and we aim to follow best-practice in this respect. It makes keeping tabs on expenses and staying on the right side of HM Revenue & Customs (HMRC) so much easier if information is accurate, up to date and stored centrally."
"Our mantra for employees when incurring expenses is: 'Would you spend it if it was your own money?' We talk each employee through the expenses system at induction and give them a copy of the expenses manual and form, which are also available on the company intranet. In addition, we hold ad hoc informal workshops to tackle any reported difficulties.
"One classic area for confusion is knowing what is an allowable expense and what is not, so we make a particular effort to make this clear and easy to understand.
"While my department retains overall control of expenses, the onus is initially on line managers to check expense reports. We ensure that they receive the appropriate financial induction and on-going training to enable them to do this and we communicate any regulatory changes promptly."
Monitor and analyse
"We include expenses in our monthly management accounts and analyse spending patterns as part of our regular cost analysis sessions. This means we can spot any areas where expenses are creeping up and take action to control them if necessary.
"We also set annual budgets for expenses, estimating the spend in each area using the previous year's figures but also taking company developments into account. For example, if we've taken on an overseas customer, this will impact things like travel expenses.
"Our policy and procedures work extremely well on the whole. In fact a recent HMRC inspection report commented on the thoroughness of our expenses manual, which should help us to apply for a dispensation in the future. The only time we encounter a problem is when an employee makes the occasional genuine mistake in the paperwork."
What I'd do differently
Sense-check the policy
"Looking back, the first drafts of our policy and procedures were a bit heavy on financial jargon. We've gradually re-written certain sections, but giving the documents to a 'test' group of employees to sense-check them before general circulation would have been useful. Explaining things in layman's terms makes it more likely procedures will be followed correctly."