The appropriate way to handle overspending on expenses depends on the situation. Sometimes, if there’s a good reason for additional costs being incurred, the best thing for an employer to do is to cover the additional expense. Staff members may have expenses that they must incur in order to perform their jobs. If such expenses go over expenses limits for a good reason (eg because a flight was cancelled and a staff member had to find last-minute accommodation) it’s often fair to the staff member to cover additional costs.
This Expense Policy template includes a clause stating that expense claims in such instances will be dealt with on a case-by-case basis and that the employer has discretion to approve them or not. This allows you to be a compassionate employer, whilst also allowing you to refuse any requests that you believe are truly unreasonable.
If you believe that a staff member is abusing their entitlements under your Expense Policy you can take disciplinary action against them. You should follow a Disciplinary procedure to help you follow employment laws when carrying out any disciplinary proceedings.