Vodafone's expenses policy: No such thing as a free lunch

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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.

Two responses

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.”

About Christian Annesley

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28th Sep 2017 13:21

Why no mention of the HMRC rules on claimable expenses?

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to peterplucker
29th Sep 2017 09:16

Hello there, thanks for the comment. Could you explain to me what you mean?

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By Bobbo
28th Sep 2017 13:34

If these policies are considered severe I must be missing out on reimbursed meals everywhere.

"The document notes that breakfast is “not generally a reimbursable expense” with the exception of overnight hotel stays."

- Generally breakfast would be eaten at home prior to leaving for work, so why would it be reimbursable unless the employee was staying away from home?

"Next to this, Lunch is also “not generally a reimbursable expense unless you are on a business trip outside the UK”."

- Again, unless you are away from home and therefore were unable to make a lunch to bring with you, why should lunch be reimbursable? Perhaps vodafone should consider loosening the restriction to business trip [anywhere].

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By ShayaG
to Bobbo
28th Sep 2017 17:29

I'm guessing the thinking is that you would have had a human need to eat wherever you are.

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to Bobbo
29th Sep 2017 09:15

Well, speaking to the lunch thing: Vodafone's policy says on a "business trip outside the UK". Here at Sift Towers, we're allowed a reimbursable lunch when we travel, even to London. I think that's fair, to be honest.

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By NDH
to Francois Badenhorst
29th Sep 2017 11:18

That's probably on the generous side of fair. If you start you day from home and end your day from home and it's a normal length working day reimbursing any meals should probably be seen as generous.

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By NLB
29th Sep 2017 09:01

Exactly.... Vodafone would have had a lot of sales (and other types) guys/gals popping down the road to see a customer for 5 minutes, having lunch and expensing it when staying on campus at Newbury would have cost them lunch.

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29th Sep 2017 14:05

Claiming reimbursement for breakfast only if you're away overnight seems perfectly reasonable to me. If it's a day trip you can eat before you leave or (if you leave very early) take food with you.

Lunch is similar. You can take food with you for day trips but if you're away for several days it's not practical (or safe!) to take several packed lunches.

As for evening meals, again it depends on timing. If you're not getting home until very late, or are staying away overnight, eating out and claiming the cost is reasonable but otherwise, eat at home like you normally do!

I've come across a number of individuals over the years who took advantage of lax policies to eat far more extravagantly while they were away on business than they otherwise would. Surely, your employer should only pay for food which you can't reasonably provide for yourself?

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29th Sep 2017 17:23

Thats pretty much the policy I used to enforce when working for a big corporate in the accounts department.

There was a whole long list of rules, you could claim lunch if more than 1 hour away from base.

I seem to recall you could claim first class rail if it was a trip over 4 hours, but 3 hours 59, tut tut.

Car mileage was a minefield, as we had to deduct the ordinary commuting distance and then advise the employees could make a claim for tax relief on the difference.

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