A spending policy is a set of guidelines set out by a company to inform how company funds should be spent. It should set boundaries and expectations so that employees are clear on what is and is not acceptable — without leaving gray areas for wasteful, unnecessary and inappropriate spending.
A spending policy should apply company-wide, laying out allotted budgets and limits for all employees. This often includes lists of approved travel expenses, such as the acceptable price range for flights, accommodations and transportation based on the region of travel.
It should also outline procedures for the use of company credit cards or virtual cards, expense reports and reimbursements.
Additionally, a spending policy should include contact information for employees who need further guidance or run into unique and unusual situations.
And finally, there should be a clear understanding about the consequences of not following the policy (i.e. warnings, suspensions, termination, legal prosecution).
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