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How Vodafone got into hot water over coffee expenses

With Vodafone the latest to make waves with its expenses policy, how can other businesses avoid such a fate and create a system deemed as fair to all?
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Does your organisation allow employees to claim for daytime drinks and snacks they’ve purchased while away on business? It’s something that expense policies will typically cover – but not always.

It’s a refusal by Vodafone to cover out-of-office costs, for a midday coffee and sandwich, which hit the headlines recently – with bosses at the mobile network provider being branded as “tight fisted”.

It was reported that the company’s policy is not to reimburse for any lunch costs that are incurred within the UK and to only compensate for breakfasts when they’re claimed as part of an overnight stay.

It’s an issue which helps to highlight the precarious balancing act that’s required when creating an effective expense policy, along with the risks of what can happen when you get it wrong.

While the media presented this as being about mean bosses and exploited workers, the reaction to the story helped to show why these kinds of policy decisions are not as black and white as they may first seem.

Divided opinion

The public response to this story was fairly evenly divided over whether Vodafone were right or wrong to impose their policy curb on daytime snack expenses.

On the one hand, people viewed the claims as being fully justified and compensation for the inconvenience and additional expenses incurred when workers are away on business.

On the other, there was a popular view that there’s no need for an employer to be covering lunch costs at all, irrespective of whether a worker is in the office or out on the road.

Whichever side you take, the Vodafone situation shows the importance of having an expense policy which is perceived as being fair. While employees may not like all the policies, they should view them as being reasonable.

It’s something that requires effective communications between managers and workers, to ensure workplace “buy in” and prevent a policy from feeling like it’s being imposed from above with little or no consultation.

Adam Reynolds, CEO of expenses software provider webexpenses, told Real Business: ”It’s so important for companies to have a clear and visible expenses policy, and for businesses to consider the impact polices can have on employees.

“It’s up to individual organisations to determine what the expenses policy is, and a system can provide the visibility needed to ensure that employees do not breach company policy and stay compliant.”

Company battleground

It’s a failure to achieve this perception of fairness which allows expenses to become a toxic battleground where bosses and workers clash. It’s when employees look to “game” the system, giving rise to workplace fraud and compliance risks.

Each year, UK companies continue to lose around £100m to falsified and exaggerated expense claims. In addition, there are the penalties and fines imposed as a result of compliance breaches.

But the negative impact goes beyond the financial risks. A misfiring expense policy can also have a damaging effect on workplace morale, lowering productivity levels and leading to an increasing in employee absenteeism.

So while decisions over relatively small reimbursement costs, such as a lunchtime coffee or sandwich, may initially seem trivial, expense policy is an area that no business can afford to make mistakes.

Today’s digital technology provides the tools needed to maintain a robust, effective and equitable expense policy. It allows an organisation to harness the benefits a mobile and flexible workforce while keeping control of costs.

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Real Business

As the champion of UK enterprise for 20 years, Real Business is the most-read SME website dedicated to high-growth businesses and entrepreneurs. Through daily news, unique insight and invaluable guides we are an essential resource for thriving businesses.

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