Top 1% controller's 6 pillars of expense policy

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Your company is leaking money

After 12 years as an Audit Director at PwC, Vipin Sethi now serves as Rippling’s Controller where his team manages millions in monthly spend. Let’s dive into his framework for building bullet-proof expense policy.

Pillar 1: Identify a strategic purpose.

Contrary to popular belief, expense policy is not just a cost-cutting tool—it's a strategic lever that can directly support critical business objectives.

How do you make this shift? Schedule meetings with department heads across the company and identify how expense policy can be strategically tightened, loosened, or re-written to better suit their needs.

For instance, you might prohibit spending with a manufacturer known for faulty parts, or loosen marketing expense restrictions to enable rapid experimentation on growth efforts. 

Based on the changes you make, track relevant metrics to validate their effectiveness. For marketing policy changes, this might mean monitoring metrics like cost-per-lead.

Pillar 2: Maintain clarity and consistency.

Most admin burdens from reimbursements originate from confusion and grey areas within the expense policy.

To combat this, Vipin says to create clear guidelines for authorized versus unauthorized transactions. Use explicit examples and even visual aids like green and red boxes.

Make the policy itself easily accessible (via Confluence or even a Google Doc), and enforce policies consistently across all spending types. This clarity not only reduces out-of-policy expenses but also saves accounting teams significant time.

Pillar 3: Enforce proactively.

The best time to stop unauthorized spending is before it happens. Reversing transactions and clawing back reimbursements creates awkward conversations and more work.

Tech-enabled corporate cards are the best way to proactively enforce policy, because they automatically block unauthorized transactions. Plus, they can be used to create custom restrictions based on employee roles and departments.

But, even without advanced technology, you proactively:

• Align individual card limits with department budgets

• Issue shared cards with preset limits for specific teams or projects

• Proactively communicate upcoming budgets, like per diems for field events

Pssst… enjoying these pillars? Get all of this in a checklist format that you can share with your team and execute against. Download here.

Pillar 4: Build with granularity.

One-size-fits-all expense policies are ineffective—what works for an engineer won’t work for a sales director. To make sure employees aren’t encumbered by expense policy…

Create tailored policies based on:

• Employee roles and levels

• Departments

• Tenure

• Location

• Dollar amounts

Also, consider implementing granular approval workflows, meaning you have the right set of approvers for each expense type. This decentralized approvals approach ensures approvers always have proper context and it reduces the workload on accounting.

Pillar 5: Demand real-time visibility.

Real-time expense tracking is crucial for:

• Catching spending outliers quickly

• Identifying duplicate charges or mismatches

• Streamlining month-end close

• Maintaining accurate financial records

While tech-enabled corporate cards offer the best visibility, companies using manual systems should still build dashboards with refreshable data sets updated at least weekly.

Vipin implores that teams consolidate their finance tools to improve data quality and connectivity. One company, Andros, reduced their month-end close from 10 to 3 days and saved $100,000 annually in licensing fees through consolidation.

Pillar 6: Continuously refine your infrastructure.

The difference between scalable and struggling finance teams often comes down to continuous refinement.

As company budgets and priorities evolve, both your expense policy and its supporting infrastructure should adapt. Neglecting expense policy will open up your company to “leaks” and misguided spending.

Schedule quarterly meetings to realign on spend management objectives, tech stack efficacy, and gather employee feedback on policy effectiveness. The investment in better infrastructure often pays for itself through reduced administrative costs and better spend control.

Get all of these pillars in a checklist format for your team, here.