This week the expenses policy of the telecoms giant Vodafone found its way into the public domain and attracted a lot of criticism along the way.
Vodafone has just been exposed for blocking staff from claiming back on basic expenses. The story broke on tech website The Register, which noted among other things that under Vodafone’s expenses policy lunches are virtually never expensable and breakfasts can only be claimed on an overnight stay.
To some, such policies might sound like par for the course, while others of you will be raising an eyebrow at Vodafone’s belt-tightening ways.
So we thought we’d spend some time navigating the landscape around expenses to help with the bigger picture.
What’s the beef with Vodafone?
Exhibit A in the frame here is Vodafone's 12-page expenses policy, last updated in June this year.
The document notes that breakfast is “not generally a reimbursable expense” with the exception of overnight hotel stays.
Next to this, Lunch is also “not generally a reimbursable expense unless you are on a business trip outside the UK”.
Evening meals can be claimed only if employees “are on duty for 10 hours or more in the day and due to arrive home after 8.00pm.”
All quite severe, some would argue. Or not, perhaps.
Vodafone is a big corporate and necessarily relies on documented, clear processes to plot its way ahead and to keep overheads under control.
As such, is it so surprising and so wrong that’s its expenses document takes a clear line on expensing of food in particular?
Ian Smith is finance director and general manager of Invu, the document management and payroll business.
He says: “It’s understandable that Vodafone draws clear lines in the sand related to expenses, but I would say it’s also important to apply some common sense. You don’t want to create a system that demotivates staff or disincentives them to book in travel and meetings, particularly if for some staff that’s the best way to generate new business, for example.”
In smaller companies, such as Invu, Smith makes the point that rules are usually to be avoided. The human element is easier to manage, so you don’t need everything to be so rules and roles-driven.
“At the same time, some will approach expenses as something you can substantially automate for the benefit of staff and the business. A tool like Concur Expense is good at that – at automating the rules. But you need rules in place, of course.”
Adam Reynolds is CEO of Webexpenses, which itself delivers software for expenses management, and he says the main issues that arise around expenses have to do with the visibility of an expenses policy.
“There is no single approach to expenses, clearly. People will have different takes on Vodafone’s policy. I would say what really drives problems is where employees don’t know where they stand.”
Reynolds argues that systems can help with providing the visibility that employees want, in that they make the process simple and transparent and easily managed.
“The other thing to say is that companies need to regularly review their expenses policies and systems and how they are working. A company like Vodafone will likely be doing that, in any case. It’s where companies leave policies to drift, and where expenses rules do not keep pace with costs, for example, that companies most often run into trouble.”
To stay on top of expenses, Reynolds and others argue that the twin disciplines of finance and HR need to work in partnership.
“We’ve surveyed on this and found that the best approach is to get the right balance around expenses, and thereby avoid running into trouble.”