How to Inform Employees Their Expense Won’t Be Covered

If you are in a role whereby, you’re responsible for staff, you may often find yourself in a position where you need have difficult conversations. Especially if your employees incur expenses that require your sign off. So how do you tell your staff that they will not be reimbursed for an unauthorised or excessive expense?

We first must understand if clear expectations have been set about what expenses are covered and any limits that apply? If this has not been communicated, staff would need to be reimbursed until a conversation about appropriate travel expenses has been had. However, this will most likely result in a difficult conversation higher up the tree as you need to find the budget to cover the unforeseen expenses because expectations were not set previously.

Once expectations are set, every time these are missed, we have an opportunity to clarify and re-set expectations going forward. A missed expectation is a chance to do things differently going forward.

If we don’t set clear expectations up front, we may make assumptions about “appropriate” behaviour based on our paradigm. That is on us, and we need to take responsibility for whatever happens here. We can learn from this and ensure that there is a clear expenses policy that is shared with all employees up front. This protects both managers and staff. When we as leaders fail to set clear expectations, we set our employees up to fail. That’s not fair on them.

This can also provide an opportunity to clarify how you want to work together going forward (when it comes to expenses or any other expectation). This is a critical time to demonstrate to your staff how you will handle a situation when something goes awry. Show up well here and you will be laying the foundation for a positive, collaborative, accountable working relationship going forward.

To do this, start by sharing your good intent. Why are you having this conversation? And more importantly, what do you want for this person coming out of the conversation? Too often we go into accountability conversations like these with a clear idea of what we want for us… but not for the other person. In this case, sharing your good intent might sound like:

“I want to chat with you about your recent expenses. My goal is to make sure that you and I are aligned and that you are set up to be successful going forward.”

Then, describe the gap between what you were expecting and what you have observed:

“I noticed you spent a large amount on your hotel room. I realise that we didn’t discuss this beforehand, but that is a lot more than our employees typically spend and I was surprised by the amount.”

Again, make sure you own your part in this—that you didn’t give guidelines up front.

Finally, set a clear expectation for going forward:

“I’ll send you our employee expenses policy today so you have a clear understanding of the guidelines.”

Conversations about expectations become much easier when you see them as collaborative rather than directive. “My job is not to hold you accountable. Instead, our job is to work together to understand and close the gap between what was expected and what really happened.” When we become part of the conversation, we are able to look at and take responsibility for how our action (or inaction) has contributed to the gap.

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