Expense policies are required to manage reimbursement requests of employees for expenses incurred on behalf of the organization.
You can find these settings in Admin Section > Setup Policies > Expenses.
Overview of Expense Types
To understand Expense Policies, first a quick summary of what expenses an employee can claim reimbursement for:
You can raise expense requests under four broad categories:
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Business Expense - Business Expense refers to any cost incurred by an employee while conducting company-related activities. This typically refers to food, gifts, office supplies, credit card payments and similar expenses made on behalf of the organization.
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Local Travel Expense - Local Travel Expense refers to costs accrued by employees while conducting business activities within a limited geographic area, such as their designated local region such as Personal Vehicles like cars, bikes or use of any public transport i.e., bus, train etc.
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Trip Expense -Trip Expense refers to costs incurred by an employee during travel for business purposes. These expenses cover various aspects of the trip, including transportation, i.e., airfare, train tickets, car rentals, accommodation, meals, incidental expenses and other relevant costs directly related to the business trip.
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Flexi Expense- Flexi Expense refers to various miscellaneous or discretionary expenses related to work. The reimbursement process for flexi expenses may require proper documentation or receipts to validate the expenditure, along with adherence to any spending limits or guidelines specified by the employer. This might include Books and periodicals, Food coupons etc.
What do Expense Policies do?
Expense policies help you define the following.
- Manage Expense Categories - used when raising an Expense request for Business Categories or Others under Trip Expenses. Typically, this would be sub-categories like food, public transport, hardware, miscellaneous expenses and so on
- Manage Taxes - When you add a category, you can choose to assign one or more taxes applicable to that category. TeamNest lets you define taxes as per your state/country. When creating categories, you can assign the taxes applicable to these categories.
E.g. Let’s assume GST is applicable in your country and further there are several GST rates. You can add each GST rate as a list in your Taxes Master. When creating a category say Food, you may apply 18% GST. But when creating a category like say Hotel stay, you may apply 28% GST.
This becomes useful when you view the tax set-off. It shows you the amount of taxes you have already paid as part of the reimbursement request. This number can benefit your organization if the laws in your state/country allow you a set-off against these taxes.
- Manage Mileage - Set the default compensation amount per kilometer, for fuel consumed when utilizing self-owned vehicles for official purposes.
Once you update these settings, your Expense Policy is ready. You can now apply it to one or more employees via a Master Policy
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