Best Practices for Ensuring Expense Policy Compliance 

A clear, well-communicated expense policy is the unsung hero of smooth financial operations. It’s also essential for protecting your business. Without consistent expense policy compliance, you’re left vulnerable to confusion and avoidable errors that stack up faster than those unclaimed receipts.

Melissa Lenos, the sole owner of King Business Solutions, has seen this firsthand. As a Certified Professional Bookkeeper (CPB) and Payroll Compliance Practitioner (PCP), she works closely with small and mid-sized businesses to streamline bookkeeping, payroll and expense workflows. 

“The most common reason employees fail to follow policies is simple,” says Melissa. “They don’t understand them. Or worse, there is no clear policy in place.”

In this article, Melissa shares her proven strategies to help business owners tighten expense policies without the typical drama and detective work.

The importance of expense policy compliance

A strong expense policy protects the books while also protecting your people. When everyone understands the rules and has the tools to follow them, you cut down on back-and-forth. It also enables you to build a team that spends responsibly without second-guessing every coffee run.  

Without proper guardrails, businesses face the risk of:

• Non-reimbursable or non-compliant spending
• Missed documentation leading to audit issues
• Internal frustration or resentment from repeated errors

“It often starts at onboarding,” says Melissa. “If someone doesn’t know the expectations from day one, you’ll be chasing receipts, correcting reports and cleaning up the mess later.”

A clear, accessible expense policy sends a powerful message: We trust you to spend company money, but here’s exactly how to do it. 

How to develop a clear and comprehensive expense policy

Building a strong expense policy isn’t just about saying no to steak lunches or late-night limo rides. It’s about giving your team a roadmap they can follow. The best policies are clear, consistent and easy to reference. 

Key components of an effective expense policy

A good policy will outline expectations and proper practices and give employees clear direction on how to work freely within the policy. When employees know what’s expected, they’re more likely to get it right the first time. 

Here’s what Melissa says every policy should include:

1. Clear definitions of reimbursable expenses

Spell out what qualifies as a business expense. Be specific about what’s covered, like client meals, mileage or software subscriptions—and what’s not.

2. Specific rules around timing and submission

Set a deadline for expense submissions to avoid last-minute scrambles and stale receipts. This keeps your month-end close clean and your finance team sane.

3. Restrictions based on category, place or time

Set boundaries to avoid awkward reimbursements. You may consider excluding expenses from specific venues or during non-business hours.

4. Expectations for supporting documentation

Not all receipts are created equal. Make clear what proof you need, such as itemized receipts instead of just the credit card slip.

“Examples go a long way in creating understanding,” says Melissa. “Show people what an acceptable receipt looks like. Provide a template expense report for them to follow.”

She also recommends reviewing policies regularly to keep up with shifting business needs.

Use tools that make policies easy to follow

Even a well-written policy can fail if the systems behind it create friction. Over half of small businesses in Canada use financial tools that don’t integrate well with each other or are clunky and unintuitive.

According to Melissa, the right digital expense tools dramatically improve compliance.

“If you’re still chasing receipts through inboxes or glove compartments, you’re wasting valuable time.”

She often recommends Float to her clients, especially nonprofits, remote teams or businesses with evolving structures. 

With Float, businesses can:

• Issue physical or virtual cards with spending limits
• Automatically prompt users for receipts
• Restrict spending by merchant, time, or category
• Pause or revoke access after repeated non-compliance

“It automates the nagging,” says Melissa. “Instead of awkward reminders, the system enforces the rules for you.”

Make expense management even easier

Streamline your business spending with automation tools built right into Float.

Learn More

Communicating your expense policy

Even the most thoughtful policy won’t make a difference if it’s buried on page 47 of a handbook or explained in accountant-speak. Expense policy compliance starts with communication—and no, a single onboarding meeting doesn’t cut it.

Let’s look at how to share your policy in a way that sticks, helps employees do the right thing and saves your finance team from becoming the office expense therapist.

Educate employees about expense guidelines

Even the best policy is useless if no one knows where to find it or how to use it. Melissa emphasizes the importance of integrating expense training into onboarding and beyond.

“Have your finance team walk new hires through the policy. And if someone makes a mistake, don’t just fix it quietly,” says Melissa. “Use it as a teaching moment.”

Use straightforward language and real-world examples

Jargon or legalese can quickly lose employees. “Policies should be easy to understand,” says Melissa. 

She recommends:

• Keeping the language clear and concise
• Using specific examples like “Submit itemized receipts, not debit slips.”
• Highlighting exceptions and consequences in plain terms

Make policies accessible

Don’t bury the expense policy inside an employee manual that is reviewed at hiring and never looked at again. Attach it to the reimbursement form, pin it in your expense software or link it in your onboarding portal. Whatever your format, make sure employees can find it quickly.

Provide ongoing review and communicate consequences

Over time, employees will forget, habits will slip and processes will evolve. That’s why ongoing review and reinforcement are key.

“Some clients ask employees to sign a policy stating that if a receipt is missing, payroll can deduct the amount from an employee’s paycheque,” says Melissa. “That may sound tough, but it underscores how serious the expectation is.”

Melissa recommends having clear consequences for non-compliance and balancing fairness with accountability. It’s okay to let technology do the heavy lifting. 

“If someone isn’t following the rules with a card, switch them to a reimbursement model with stricter checks,” she says. “Let the system reinforce what needs to happen.”

Float: A solution built to support clarity and trust

Expense policy compliance doesn’t have to feel like breathing down everyone’s neck. With clear expectations and the right tools, it becomes a team sport instead of a game of gotcha. 

That’s where Float comes in. As a modern expense management platform built for Canadian businesses, Float gives finance teams real-time visibility, automated receipt capture and customizable spending controls that keep policies front and centre.

When policies are clear and the tech does the legwork, compliance can become a natural part of your business process instead of a monthly battle.

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