A couple of days ago, a customer wrote in and asked if we could provide them a sample travel policy that used “Abacus language.” Good question!
We can certainly show you how a travel policy would look and operate in Abacus, but there’s no special language required to design it — just a list of warning rules and blocking rules that the admin creates with an easy-to-use rule builder. All of these rules are written in plain English, so anyone can set up and understand them.
Here’s a blocking rule that would prevent a $35 expense from being submitted without a receipt.
And this is a warning rule that will request that the employee fill in the “Client” field before they confirm a meal expense. The expense can still go through even if they don’t. (Note the “should” below versus “must” above.)
That’s it! These rules are all there is to “Abacus language.”
Formatting travel policy
Your company probably already has a travel expense policy. (If not, time to create one. Here’s a guide you might find helpful.) Make sure the policy is available somewhere your employees can easily see when they’re on the go.
Implementing it is a matter of defining the parameters of your expense policy and inputting them as rules in Abacus. Suppose your travel policy urges frugality in hotel accommodations. That’s a general expectation that’ll vary case-by-case, but you might consider putting it into Abacus as a warning rule that flags expenses of more than, say, $1500 for a hotel booking.
You decide whether to do this and how much to do it for. It’s not necessary to add these types of warning rules, but thinking through this exercise is a good way to test how easy it is to follow your own expense policy.
One feature of the rule builder is the ability to specify when, where, to whom, and in which cases each rule applies. This is especially helpful in travel policy, where most costs are incurred by a few teams.
Note that Abacus sorts expenses directly into your chart of accounts. In Abacus, accounts are called “categories.” This rule, for example, affects items that will sync to the “Gas / Mileage” account.
Since the sync between Abacus and your accounting software is direct, set up your chart of accounts to accommodate the degree of granularity you want in reporting. If you want to distinguish “Lodging – Client Visit” from “Lodging – Conference/Seminar,” build those accounts in your accounting software and Abacus will help you specify rules for each.
Given the variance of available prices, airfare involves a lot of discretion on the part of the purchaser. Abacus has an integration with NexTravel, so if you use that software you can build your policy and expense airfare within their platform. If you have a travel agent you really trust and for whom you want to expedite payment, you can auto-approve items that come specifically from them.
Most likely, though, you’ll want to simply build rules that require complete information. They don’t need to be complex. Here’s the entirety of what one Abacus customer uses:
Keep in mind that all these safeguards affect only the stage before expenses are submitted. Every power you currently have to approve or reject expenses, you will keep.
The same principles apply here as to airfare: our clients generally stick to creating rules that require complete data to be input.
Taxis, car rentals, and other ground transport costs vary enormously from one situation to another. This makes it particularly important to have a chart of accounts granular enough to enable good analysis. It’s common to separate out types of taxi rides; car rental; train tickets; gas; and mileage.
Cabs are tricky. You want to encourage responsible spending, but not with so much rule enforcement that an employee feels harangued for saving money by pairing a more expensive cab ride with a much cheaper hotel. Many of our customers opt for a minimal safeguard — something like simply requiring a receipt regardless of fare amount. Here’s an example of the rules that two different types of cab fare might get.
For car rental, trains, and fuel, best practice is to request a client to be associated with each expense item.
As far as mileage reimbursement, we recommend using the IRS standard rate. Choosing a different amount can jeopardize your tax deductions. Here’s what it looks like in the admin dashboard.
Meals & entertainment
There are two types of travel meals: those for your employees and those for your clients.
Employee meals: Per diems are only common with government agencies, but Abacus makes them easy to create; it’s just the difference between a warning rule and a blocking rule. The top rule you see below is equivalent to a $50 per diem. The bottom rule is what most companies do. (Warning and blocking rules do appear under different headings in Abacus, so you won’t confuse one for the other.)
Client meals: If your people are traveling to interface with clients, there’s a good chance they’ll incur some entertainment costs in addition to meals. It’s up to you whether to suggest or impose a budget on these expenses, but be aware of two best practices. One is to require that a client meal expense specify which client it was for. The other is to use the Attendees function of Abacus to identify who from your company was at the dinner. You can split the expense between each employee or not, but it’s generally a good idea for data purposes to see who participates in client meals.
Reconciling travel expenses
Many finance teams have trouble getting expenses and documentation on time. Abacus tries to solve this problem by lowering the barrier to submission with our app; even if an employee can’t enter all the info right when they get a receipt, they can snap a picture of it and expense it later.
If your employees are traveling with corporate cards, you’ll love the Team Cards page, which lets you overview which cards have items outstanding and even ping cardholders to enter all their expenses.
For employees spending money on their own cards, you can include a rule in your policy requiring expenses to be submitted within a certain amount of time.
This is a rule that, if communicated properly to the team, will ensure you never wait long for your travel-related expenses to come in.
The best way to think of these rules is not as a method of enforcement, but as a channel of communication: here’s what we need from you, the expenser, in order to get our books closed and pay you back as quickly as possible.
The most important aspect of coding any rule into Abacus is making sure that it corresponds to what an employee would reasonably conclude from reading your expense policy — which, in turn, needs to conform to your culture. That’s when your travel expense policy makes sense.