Stop approving the expenses!

agile, management30

Trust employees and stop approving expenses as a manager! Some organizations have rigorous policies regarding expenses; some have no rules regarding the payment of expenses and agree to leave it up to the leaders to approve them. It can also be up to the employees to decide what they would like to have reimbursed. 

When I was employed and went for a team outing where the organization paid for the event, I did not fill in an expense form for parking or gasoline. When the organization paid for the outing, I found it no problem to pay for parking and fuel myself. I know that not everyone thinks like this. That is normal, of course. Some people will fill in an expense form for parking and fuel in this situation. This makes me wonder if this is fair? Should I also reimburse parking and fuel? Should the other people be grateful for the event itself and not demand to have the transport expenses covered by the company?

I had some drinks with a friend, and we discussed this case. Some people try to have all expenses reimbursed, whereas others do not. How can you deal with this as a manager?

I believe in the principles of Management 3.0, and one of the principles is: Manage the system, not the people. Checking all reimbursements and approving or rejecting them or questioning their validity is not managing the system. That is managing the people. Managing people is hard work and hardly ever successful.

Let’s look at a different approach, following the Management 3.0 principles.

Let’s start with transparency. All reimbursements are fully transparent for everyone. You can see all reimbursements of all your colleagues, and yes, also from the leaders, including the CEO! The manager doesn’t need to check all reimbursements – everyone can. 

I can hear the Management 1.0 followers thinking: that will cost so much time; everyone will check all those reimbursements every day. All the time wasted with that! Would you think your employees will open the system regularly, and the whole day click on the refresh button and forget about their actual work? That would say more about your management style than about your employees!

What about approvals? Why not have employees approve each other’s reimbursements? For example, if three people click on Approve, it is approved. Simple as that. Maybe add a question like: “Are you sure you want to approve? Is this what you also would reimburse yourself?” Again, I hear some managers thinking: what if three people would work together and reimburse vast amounts of money? Back to the transparency. Don’t you think other people would notice it? Additionally, as a manager, you can also see all reimbursements. I am not saying you should check all of them, but just pick a few random ones. There is nothing wrong with that.

I am not saying you should have policies in place. Management 3.0, or agile, is not equal to having no rules or constraints, and you can still have procedures in place. For example, fuel expenses can never be more than 150 euros, or at least six co-workers need to approve when the total reimbursement is more than 300 euros.

Depending on the culture in your organization, you need to think about a “Flag” button. Not all people could feel comfortable flagging a reimbursement. Therefore, making the flag button anonymous could be a temporary solution. This will mark the reimbursement as, let’s call it interesting, and other people can comment on it, or maybe just not approve it. I believe the goal should be to create a culture where people feel safe to tell each other if they are a bit too enthusiastic about reimbursements 😉

Will, this work in your organization? No clue… I don’t think it will be a good idea to implement this tomorrow in an organization of 10.000+ workers. Small start-ups or scale-up organizations, yes. In large organizations, start small in a department of a maximum of 150 people where people know each other and feel relatively safe to join this experiment.

Trust employees and stop approving expenses as a manager!

What do you think? Would you dare to start this experiment?

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