A business overhead expense policy is a document https://newjerseyweddings.org/ that outlines the types of overhead expenses that are eligible for reimbursement and the procedures that employees must follow to submit reimbursement claims.
Why is a business overhead expense policy important?
A business overhead expense policy is important for a number of reasons, including:
- To ensure that employees are only reimbursed for eligible expenses. A policy can help to prevent employees from submitting claims for personal expenses or expenses that are not related to their job.
- To ensure that expenses are reasonable. A policy can establish guidelines for what is considered to be a reasonable expense, such as setting limits on travel expenses or meal reimbursements.
- To ensure that expenses are properly documented. A policy can require employees to submit receipts and other documentation to support their reimbursement claims.
- To reduce the administrative burden on the company. A well-written policy can make it easier for employees to submit reimbursement claims and for the company to process those claims.
What should be included in a business overhead expense policy?
A typical business overhead expense policy will include the following information:
- Eligible expenses: The policy should list the types of expenses that are eligible for reimbursement. This may include things like travel expenses, meal expenses, and office supplies.
- Reimbursement rates: The policy should establish reimbursement rates for eligible expenses. For example, the policy may set a mileage rate for travel expenses or a per-day limit for meal expenses.
- Submission procedures: The policy should outline the procedures that employees must follow to submit reimbursement claims. This may include things like submitting receipts and other documentation, and obtaining approval from a manager.
- Approval process: The policy should describe the approval process for reimbursement claims. This may involve having a manager approve claims before they are processed or having a dedicated finance team process claims.
Tips for writing a business overhead expense policy
Here are a few tips for writing a business overhead expense policy:
- Be specific and clear. The policy should clearly define what expenses are eligible for reimbursement and what procedures employees must follow to submit claims.
- Be fair and reasonable. The policy should establish fair and reasonable reimbursement rates and approval procedures.
- Communicate the policy to employees. Once the policy is written, it is important to communicate it to employees so that they are aware of their rights and responsibilities.
- Review and update the policy regularly. The policy should be reviewed and updated regularly to ensure that it is still relevant and effective.
A business overhead expense policy is an important document that can help businesses to control costs and ensure that employees are only reimbursed for eligible expenses. By following the tips above, businesses can write a policy that is fair, reasonable, and easy to administer.