Policies

Expense policies are an effective way to control your employee expenses. It defines the rules and limits that every employee should keep in mind while incurring expenses on behalf of the company. Manually enforcing the policy is as much a pain as manual expense reporting. We understand your pain and hence, we have taken the first step towards automating your expense policy.

So, how does this work? The magic happens in the Admin > Policies section. To begin with, a default policy will be enabled for ‘ALL’ the employees in your organisation, with zero limits and rules. You(being the admin) can change the limits and rules in the default policy, but cannot delete it.

Since the nature of work is different for different departments, it is possible that the spending limits might also vary. In such cases, you can create multiple policies that cater to individual departmental needs. For instance, since the sales team travel a lot more than other departments, they will be provided with a higher limit on ‘Travel’ expenses when compared to other departments. Here, you can create a policy named ‘Sales Department’ and associate it with the corresponding department. Similarly, you can create expense policies that can be assigned to individual users.

Once you are done creating the policy and assigning to users, it will be automatically applied on all expenses. Expenses exceeding the defined limits will be flagged as a policy violation. Currently, we do not block the submission of such expenses. But don’t you worry, we’ll be supporting that soon!

Configuring policy currency

Policy currency allows you to reimburse the employees in the currency configured in their policies. If you configure the policy currency in a policy and associate it to the employees, they can create reports only with this currency. You can then reimburse the employees in the same currency with which they had created the report.

Let’s understand this better with an example:

Let’s say John owns ABC Private Limited, a product-based company in the United States. The company has its branches spread throughout various countries, with India being one among them. The base currency of the organization created by John is, USD. If John wants to reimburse the business expenses of the employees in India, he can create a policy, configure the policy currency as INR and associate it to the corresponding employees. Once this is done, the employees in India can create reports with INR only, after which John will be able to reimburse them in INR.

To configure the policy currency, select a currency from the Currency dropdown under Policy Settings and click Save and Continue.

Configure Policy Currency

Note: This feature is still in early access. Please contact support@zohoexpense.com to enable this feature.

Uploading travel document

Apart from the spending rules and limits, Companies will have a travel document with rules on corporate card usage, list of allowable expenses, timeframe on submission, approval and reimbursements of expenses and so on. You can upload the soft copy of this travel document for easy reference. Your employees will be able to view the travel document on the dashboard of their respective Zoho Expense accounts.

Upload the travel policy in one of the following formats:

  • PNG
  • JPG/JPEG
  • PDF
  • doc/docx Uploading the travel document

Ensure that the file size is less than 7MB.

  • Click Save.

Configuring general rules, applicable to all expenses

General rules are applied to all expense categories by default. These limits will be applied only on users associated with the policy. General rules include the following:

Configuring general rules

  • Expense amount limit: You can set an amount limit for every expense entry. Expense entries exceeding the limit would be considered a policy violation.
  • Receipt required limit: You can set a minimum amount for which receipt submission is required. Any expense entry exceeding the receipt required limit will require the attachment of a receipt as proof of expenditure. Failure to attach receipt will be flagged as policy violation.
  • Make Description mandatory: You can make description mandatory for all expenses.
  • Allow uncategorized expenses to be part of expense reports: Uncategorised expenses are seen when you autoscan a receipt containing a new merchant. On disabling this option, users cannot add it to an expense report.

Configuring surcharge on foreign currency expenses

Surcharge is an amount that organizations give to their employees for the additional fee charged while exchanging a foreign currency.

To understand this better, let us take a look at an example.

Bailey Miles, an employee from the USA goes on a business trip to Canada. Her employer, John has configured a surcharge of 5% (Surcharge is applied to all the expenses recorded in any currency other than the base currency). John has given her a cash advance in USD. When she converts the cash advance from USD to CAD, an additional fee is charged by the currency exchange and the remaining amount is given to her. Later, when she records the expenses incurred in CAD, a surcharge of 5% will be added to the expenses automatically to compensate for the additional fee charged while exchanging the currency.

Note: This feature is available for early access. Email us at support@zohoexpense.com to get access.

Admins can set a surcharge percentage to be applied to expenses when employees incur expenses in foreign currencies. To enable:

  1. Navigate to Admin > Policies.
  2. Select the policy for which you would like to enable this option.
  3. Mark the Surcharge Percentage option.
  4. Enter the surcharge percentage for the expenses incurred in foreign currencies.
  5. If you have integrated with Zoho Books, you can select a category from the Processing Account dropdown to track the surcharge amount. Note that the surcharge amount will not be tracked under the category of the expense for which the surcharge is applied.
  6. Click Save. Surcharge Percentage

Once the admin enables this option, surcharge amount is automatically calculated when employees record expenses in foreign currencies. For example, if Bailey Miles records an expense of $100 and the policy allows a surcharge of 5%, surcharge will be recorded as $5, that is, 5% of $100.

Defining category-specific limits

Here, you can select the categories that you want your employees to see. If you have integrated with Zoho Books or QuickBooks Online, the imported accounts will also be available in the list. You can set individual limits to each category. i.e override the general rules and make them category specific. To do that:

  1. Hover over the category for which you would like to set the limits. Defining category specific limits
  2. Click on the override option located at the far end corner of the row. Overriding general rules
  3. Select and provide the expense amount limit and receipt required limit specific to that category.
  4. Choose whether or not to make description mandatory.
  5. Click Save and Continue to proceed to the next step.

Configuring mileage and per diem rates

Mileage Rate

If your employees regularly incur mileage expenses, you can add mileage rates based on which the mileage expenses will be calculated.

Configuring mileage rates

  1. Select a default mileage unit (km/mile) and Category (Fuel/Mileage expenses). This cannot be changed while creating an expense.
  2. Click on +add new rate.
  3. Provide a start date and a mileage rate for that date.
  4. You can create a default rate (created without specifying a date), which will be applicable for mileage expenses recorded before the initial start date.
  5. If mileage rates in your organization are vehicle specific, you can associate a vehicle with the mileage rate by click on the +New vehicle button on the top right corner of the list. The vehicles you add will be common to all policies.
  6. Click Save and Continue.
  7. If you do not want to configure mileage rates in the policy, click Skip to continue to the next step.

Per Diem Rate

Per diem is a daily allowance that an organization provides to an employee while they travel for work. It includes meals, lodging and other incidental expenses like tips to hotel staff, baggage carriers etc. If your company doesnโ€™t provide per diem, you can skip the per diem configuration and complete the setting.

Admins can set up various per diem rates according to the travel duration and the location (cities and countries) to which employees will be traveling to. You can also import and export the per diem rates.

Let’s say, your employee’s work requires them to travel only for a couple of hours in a day. You can set up per diem rates for specific number of hours and per diem expenses will be calculated based on the hours your employee records.

Note: This feature is still in early access. Please contact support@zohoexpense.com to enable this feature.

Setting up Per Diem

Admins can set up per diem for their organization.

Default Category: This category will be shown by default while creating a per diem expense.

Default Rate: This rate will be used to calculate per diem when an employee records a per diem for which you have not configured the main per diem rate.

Note: You can configure Travel Day Per Diem (early access) if you wish to provide your employees allowance based on the number of hours they travel instead of a full day allowance.

Configure per diem based on travel hours: You can set per diem rates for different travel durations (0-6 hours, 6-24 hours, etc). If the duration your employee records, falls in any of the configured travel durations, per diem will be calculated by applying the corresponding percentage of the applicable per diem rate.

To configure:

  1. Check the Configure Per Diem based on travel hours option.
  2. Enter the Travel Duration and the Percentage. (Eg. 0-5 hours & 70% of main per diem rate) Configure Per Diem based on travel hours

Per Diem Rates: You can set up multiple per diem rates that are specific to different locations that your employees travel to.

To configure:

  1. Enter the Country and the City.
  2. Select the Date from which the rate will be applicable.
  3. Choose the corresponding currency from the dropdown and enter the per diem rate.
  4. Check the Apply Per Diem Based on Travel Hours option if you want the per diem amount to be calculated based on the percentage of per diem that you have configured for travel hours.
  5. Check the Split the per diem based on expense type option to split the per diem rate into components, of expense types. An Expense Type is a group that consolidates a number of expense categories.
  6. Choose an expense type from the dropdown and enter a corresponding per diem rate. The per diem rates configured for the expense types should sum up to the main per diem rate.
  7. Click Save.

Once this is done, the per diem expenses will be calculated based on the per diem rates configured in this page.

Configure Per Diem Rate

Configuring Rules

Rules help you set daily, monthly, yearly or custom limits to have a check on the expenses of your employees. If the employees’ expenses exceed the set limit, you can choose to send a warning notification or you can block the employee from submitting that expense.

Note: This feature is still in early access. Please contact support@zohoexpense.com to enable this feature.

To configure rules:

  1. Click the + Add Rule button.
  2. Provide a Name for the rule and select a Rule Type from the dropdown. Configure Rule Type

The following are the Rule Types:

  • Daily Limit: If you have selected daily limit, you can restrict the amount expended by the employees on a daily basis. You can choose a Daily Limit Type from the following:
  • Fixed amount: If you choose this type, you can enter a fixed amount in the Amount field that an employee can spend per day. You can apply this limit to all categories or choose a particular category from the dropdown to set category-specific limits. If the employee spends more than the set limit, select the action type as:
    • Warn: If you want to mark the expense with a warning notification.
    • Block: If you want to prevent the employee from creating that expense.
  • Location Based Per Diem Amount: Choose this option if you want to set a daily limit based on the per diem configured for the location the user is travelling to. Let’s try to understand this with a scenario: Let’s say Matthew wants to send his employee, Kumar from India to Canada for a business meeting. Matthew has already configured the per diem rate as $200 for Canada in the policy. If Matthew selects Location Based Per Diem Amount as the daily limit type and enters 50% in the percentage field, Kumar cannot create expenses that exceed $100 per day. If he creates, he will receive a warning or will be blocked from submitting that expense based on the configurations.
  • Expense Type Based Per Diem Amount: If you want to set a daily limit based on the location the user is travelling to and its specific expense types, choose this option. In the above scenario, let’s say Matthew has split the per diem rate based on the expense types: Food and Lodging. Here, in the Rules page he has selected Expense Type Based Per Diem Amount as the daily limit type and have set the daily limit as 100% of Food and 50% of Lodging. Now, Kumar will receive a warning or will be blocked from submitting the expense, if the expense amount exceeds 100% of Food and 50% of Lodging of the set per diem rate.

After setting up the daily limit, click Save.

Note: In all the above daily limit types, if the user has configured a daily limit for a specific category and the sum of the expenses recorded under that specific category exceed the set limit, then all the expenses recorded under that specific category will receive a warning notification or will be blocked from submission as per the set action type. Configure Daily Limit Type

  • Monthly Limit: If you want to restrict the expenses of the employees on a monthly basis, choose this rule type. Enter the amount limit in the Amount field. If you want to set a monthly limit for a particular category, select a category from the dropdown. Select the action type as Warn or Block from the dropdown and click Save.
  • Yearly Limit: You can set a yearly limit above which the employees cannot spend every year. Enter the amount limit in the Amount field. If you want to set a yearly limit for a particular category, select a category from the dropdown. Select the action type as Warn or Block and click Save to save the rule.
  • Custom: In this rule type, you can set up custom criteria based on which the actions are triggered. For example, let’s say that the set criteria are:

When the trip is International AND the expense amount is greater than 1,00,000. In this case, when an expense satisfies this criteria, you can choose to send a warning notification or block the submission of that expense. You can also enter a violation message that you want to show when the user violates this rule. After setting up the criteria and the violation message, click Save.

Configure Daily Limit Type

Associating policy with a user

On creating an organization, a default policy would be automatically created for you, sans any limits or rules, which will be applied to all the users by default. However, if you would like to associate policy to individual users, perform the following steps. To associate a different policy with user, please perform the following steps:

Associating policy with a user

  1. Navigate to Admin > Users.
  2. Go to the user on whom you want to apply the policy.
  3. Scroll down to the Policy field.
  4. Select the policy from the drop-down and click Save.

Policy based access permissions

In Zoho Expense, you previously had the option to restrict/grant access permissions while creating roles and assigning them to users. You could restrict the user to view their report alone or grant them access to all company reports.

To add to this, you can now create roles, set policy based permissions, and assign them to your users. This option enables users to perform certain actions based on the policy they are an admin of.

Note: Only policy admin(s) can be given the access permissions.

Let us take a look at a couple of scenarios where this feature will come in handy.

Scenario 1:

Case: Mark Ryan runs a construction company which has branches at France, Canada, and Egypt. He has a finance team for each of his branches. He wants each finance team to be able to view expense reports from their respective branches only.

Solution: He can create policies, namely France, Canada, Egypt and add the finance team members as policy admins to their respective policies. This would ensure that they can view the expense reports submitted by the users from their policy.

Scenario 2:

Case: Rupa Ved is a member of the logistics department of Silver Spoon firm. She wants to view the expense reports, trip requests, and advance requests of her department members.

Solution: The Admin can create a policy with Rupa as the policy admin. This would ensure that she can view all the expense reports, trip requests, and advance requests of her department members.

Quick links:

How to add a policy admin?

To add a policy admin, follow the instructions mentioned below:

  1. Go to Admin from the left-hand sidebar.
  2. Click Policies.
  3. Hover your cursor over the policy for which you wish to add an admin, and click edit.
  4. Under Policy Settings, navigate to the field Policy Admin(s) and add the user(s).
  5. Hit Save. Adding policy admin

Supported policy based actions

For now, you can give policy based permission to view expense reports, advance payments, and trip requests, to policy admin(s). We will be adding more policy based actions in the coming days.

Note: Trip requests is a feature which is available for early access. Contact support@zohoexpense.com if you would like us to enable it for you.

Create a role with policy based permissions

  1. Click the gear-shaped Settings icon and go to Users.
  2. Move over to the Roles tab.
  3. Click +New Role.
  4. For expense reports: Under Expense Report, click the View Report field. From the dropdown, select Policy Reports.
  5. For Advance Payments: Under Advance Payment, choose Policy Members in the Record Advance For field.
  6. Scroll down and hit Save. Policy based permissions

Now the users with this role will be able to view all the reports and advance payments in the policy for which they are an admin.

Policy admin’s actions

Once you have everything set up follow the steps mentioned below to view the policy based expense reports/trip requests/advance payments:

  1. Go to Reports Approval.
  2. Switch to the All Approvals tab. Here you will be able to view all the expense reports submitted by your policy members.
  3. Follow similar procedures for trip requests and advance requests.