Policy violations

Learn how to handle expenses that exceed company limits or break policy rules, and understand the approval process for exceptions.

What is a policy violation?

A policy violation occurs when an expense doesn't comply with your organization's established expense policy rules. These violations are automatically detected by the system and flagged with a visual red flag badge on the expense, alerting both you and approvers that the expense requires justification or correction. Policy violations don't necessarily mean the expense is improper—many legitimate business expenses violate policy due to circumstances beyond your control, such as limited hotel availability or last-minute travel changes.

The key to managing policy violations effectively is providing clear business justification that explains why the violation was necessary and demonstrates that the expense served a legitimate business purpose despite not meeting standard policy requirements.

Common policy violations

Understanding the most common types of policy violations helps you anticipate issues and provide appropriate justification.

Amount exceeds daily limit. If your company policy limits meals to $50 per day but you submitted a $75 lunch expense, the system flags this as a violation. To handle this situation, add justification explaining the circumstances—for example, "Client meeting with 3 people, my portion was $25 but I paid the full bill" or "Conference venue had limited options, all meals $60-80." Alternatively, you might split the expense across multiple days if the accounting makes sense.

Amount exceeds per-transaction limit. When company policy sets a single meal expense maximum at $100 but your dinner cost $150, you need strong business justification. Explain the context clearly: "Dinner with 4 key clients from ABC Corp while closing $50,000 annual contract renewal" or "Team celebration dinner for 6 people after successful product launch." Getting manager pre-approval before incurring such expenses is always the safest approach.

Missing receipt. Policy typically requires receipts for all expenses above $25, but you incurred a $45 parking expense without obtaining a receipt. To handle this, upload the receipt if you can still obtain it from the parking facility or your credit card statement. If the receipt is truly unavailable, add a detailed note explaining the situation: "Receipt was not provided by attendant, validated charge on credit card statement dated March 15" or "Receipt was damaged by rain, can provide credit card statement if needed."

Wrong expense category or policy restriction. If company policy prohibits first-class flights but you booked a business-class international flight, you must justify the exception. Explain the circumstances: "Only option available for 14-hour flight, economy was sold out due to booking on short notice" or "Medical condition requires extra legroom, have documentation from physician." Alternatively, if the booking can be changed, consider rebooking in economy class before the trip.

Out of policy category. When policy states that personal entertainment is not reimbursed but you submitted movie tickets, you need to either remove the expense from your report entirely or provide compelling justification that demonstrates it was actually business-related: "Client entertainment—took client's children to movie while discussing contract with client over lunch."

Late submission. If policy requires submission within 30 days of the expense date but you're submitting a 45-day-old expense, add a clear explanation for the delay: "Extended sick leave prevented timely submission, have medical documentation" or "Overseas assignment without internet access, submitted upon return." You may also request a formal waiver from your manager if the circumstances were truly extenuating.

How violations are detected

Eloope's policy engine automatically checks expenses against your organization's configured rules at multiple points in the workflow to ensure nothing slips through.

The system performs automatic checks when you first create an expense, validating it against all applicable policy rules immediately. Additional checks occur when you add an expense to a report, ensuring the expense still complies with policy in the context of other expenses in that report. Final validation happens when you submit the report for approval, catching any violations that might have been introduced through editing or that arise from the combination of expenses.

Violations appear with a prominent red flag badge next to the expense amount, accompanied by a clear message explaining which policy rule was violated and by how much. This immediate feedback allows you to address issues before submitting the report for approval.

Handle a violation

The process for handling violations differs slightly depending on when you discover them, but the core principle is the same: provide clear justification.

When creating an expense with a violation, follow this process. The system flags the violation with a descriptive message explaining which rule was broken. Add your justification in the Description field or Notes field, whichever is more appropriate for your organization's practices. Explain why the violation was necessary from a business perspective, providing specific details rather than vague statements. Provide relevant business context such as client names, meeting purposes, or extenuating circumstances that made compliance impossible. Save the expense—the violation remains flagged, but your documentation travels with it through the approval process.

Example of strong justification. Rather than simply saying "Conference hotel," provide comprehensive context: "Hotel rate of $250/night exceeded policy limit of $200/night due to three factors: First, this was the official conference hotel with no alternative venues within 10 miles. Second, the conference was booked with only 2 weeks notice based on urgent client request. Third, attending this conference was necessary to maintain relationship with our largest client, ABC Corp, representing 40% of annual revenue."

Manager's role

When violations reach the approval stage, managers have several options for handling them appropriately.

Approve with override. If the violation is well-justified and the business need is clear and compelling, managers can approve the expense despite the policy violation. This doesn't change the policy for future expenses—it simply acknowledges that this specific situation warranted an exception. When approving a violation, managers must add a comment explaining their reasoning to create an audit trail.

Request clarification. If the justification is insufficient or unclear, managers can add comments asking for more information rather than immediately rejecting the expense. You can respond to these comments to provide additional context, and the manager can then make an informed decision without the delay of a full rejection and resubmission cycle.

Reject. When a violation is not justified or when the expense appears to be genuinely out of policy without legitimate business reason, managers will reject the report. The rejection comment should clearly explain what needs to be corrected—either providing better justification, reducing the amount, or removing the expense entirely.

Prevent violations

The best approach to policy violations is preventing them before they occur through awareness and planning.

Before spending, take these proactive steps. Review your organization's expense policy thoroughly by navigating to Settings → Policies (or requesting a copy from your manager if you don't have access). Check the specific category limits that apply to your planned expenses. Get pre-approval from your manager for any large expenses that might approach or exceed limits. Book travel arrangements early to secure compliant rates before availability decreases and prices rise. Whenever possible, choose options that fall within policy guidelines rather than pushing the limits.

When creating expenses, follow these practices. Select the correct category from the dropdown menu so the system applies the right policy rules. Upload all required receipts at the time of expense creation rather than waiting. Submit expenses within the deadline specified in your policy, typically 30 days from the transaction date. Add clear, detailed descriptions that explain the business purpose even for expenses that don't violate policy—this habit helps when violations do occur.

View your policy

Understanding your organization's policy is the first step in compliance and appropriate exception management.

Navigate to Settings → Expense Policy in Eloope, or request a policy document from your manager if system access is restricted. Review the limits by category carefully, paying special attention to the categories you use most frequently. For meals, note both daily limits and per-transaction limits, as both may apply. For accommodation, understand nightly rate limits and whether they vary by city or region. For transportation, be aware of class restrictions such as economy-only for flights under certain distances. Each category may have specific rules beyond just monetary limits, such as pre-approval requirements or documentation standards.

Violation consequences

The consequences of policy violations depend on the nature and frequency of the violations and whether they were properly justified.

Minor violations with proper justification. When you exceed policy by small amounts but provide clear business justification, your manager can typically approve without any negative consequences. These occasional exceptions are expected and don't impact your standing as long as they're legitimate and well-documented.

Repeated violations without justification. If you consistently violate policy without providing adequate business justification, several consequences may occur over time. Your manager may start rejecting future violations that they previously would have approved, requiring you to obtain pre-approval before making any purchases that might violate policy. You might be asked to attend a policy review meeting with your manager to discuss spending patterns and expectations. In serious cases, repeated violations could lead to disciplinary action as specified in your employment agreement.

Fraudulent violations. Serious violations involving dishonesty carry severe consequences. Claiming personal expenses as business expenses, intentionally inflating amounts beyond what was actually spent, or fabricating receipts are all grounds for immediate investigation and potential termination of employment. These actions violate not just company policy but also fraud laws and ethical standards.

Best practices

Following these best practices minimizes policy violations and ensures smooth approval when exceptions are necessary.

Familiarize yourself thoroughly with your company's expense policy, reading it completely at least once and referring back when planning significant business expenses. Get pre-approval from your manager before incurring expenses that you know will violate policy but that you believe are necessary for business reasons. Document all business justifications clearly and specifically, including names, dates, amounts, and business outcomes whenever relevant. Be honest and transparent in all expense reporting—if you made a mistake or incurred a personal expense, own up to it rather than trying to hide it. Communicate with your manager early and proactively when you anticipate needing policy exceptions, rather than surprising them after the fact. Choose policy-compliant options whenever possible, using exceptions only when business needs truly require them.

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