Business Spending Policy Template

Why even a one-person business benefits from writing this down

• You decide once instead of every transaction
• Adding a contractor, freelancer or your first employee becomes trivial
• Receipts and tagging stay consistent for your accountant
• Disputes about "is this claimable" disappear
• HMRC enquiries are easier when there's a documented policy

The template — copy, adapt, share

SPENDING POLICY — [COMPANY NAME]
Last updated: [date] | Owner: [name]

1. PURPOSE
This policy explains what can be bought on behalf of [Company name], who can
approve it, how to pay, and what evidence is required.

2. ALLOWED CATEGORIES
The following categories are pre-approved when they directly support the
business:
- Software subscriptions used for work
- Office supplies and equipment up to £[limit] per item
- Travel to client meetings and supplier visits (standard class)
- Subsistence on overnight business travel (reasonable amounts)
- Marketing, advertising and professional services
- Training and books directly relevant to your role
- Hardware refresh (laptop / phone) according to the refresh cycle

3. APPROVAL LIMITS
- Up to £100: any team member, save the receipt and tag the transaction
- £100 – £500: line-manager approval in writing (email or chat is fine)
- £500 – £2,000: director approval in writing
- Over £2,000: director approval plus a written purchase rationale

4. PAYMENT METHODS
- Use the company expense card or business card where the supplier accepts it
- Subscriptions should be on a company card, not a personal one
- Personal cards may be used for genuine emergencies and reimbursed monthly
  with receipts
- No cash withdrawals on company cards

5. RECEIPTS AND TAGGING
- Capture a receipt within 7 days using [accounting tool / receipt app]
- Tag the category and any project / client code
- For meals out, note who was present and the business purpose
- For mileage, log start, end, miles and reason in the mileage tracker

6. NOT PERMITTED
- Personal items or gifts (other than approved client gifts under £50)
- Alcohol-only entertainment
- Fines, penalties or parking tickets
- Cash advances on credit cards
- Anything that would embarrass the business if it appeared in a newspaper

7. EXPENSES POLICY (REIMBURSEMENTS)
- Submit a monthly expense claim by the [5th] of each month
- Include receipts; claims without receipts may be rejected
- Reimbursements paid by the [15th] of the following month

8. CHANGES
This policy may be updated by directors. Significant changes will be
communicated by email and the new version filed at [shared drive location].

Customising the categories

The template lists generic categories. Replace them with what your business actually buys. For example:

• Agency / consultancy: client entertainment with limits, project travel, subcontractor fees
• Trades: tools and PPE up to £X, fuel for business vehicles, materials with project tagging
• E-commerce: inventory purchasing thresholds, advertising spend caps, return-handling costs
• Software / SaaS: cloud spend per-engineer caps, AI API limits, conferences

Setting approval limits

Approval limits should be based on risk, not on hierarchy alone. A small one-person business might cap individual purchases at £500 with no approval; a five-person business with junior team members might cap at £100 with line-manager approval at £500. Two rules of thumb:

• Lowest sensible limit — what would you be uncomfortable seeing on a card statement without prior notice?
• Approver must respond within 24 hours — or the policy slows the business down and gets ignored

Rolling it out

1. Write a first draft using the template above
2. Review with anyone who'll be subject to it
3. Sense-check the limits against your last three months of spending
4. Publish to a single, findable location (shared drive, wiki, Notion)
5. Mention it in the onboarding of any new team member
6. Review and update annually