Help Center / Expense Management

Expense Policies

What is this page about: How to write, apply, and enforce expense policies in Light. Read this if you're setting up spending rules for meals, travel, or other expense categories, or if you want to understand how Light's AI checks a submitted expense report against your rules.

On this page

  • What an expense policy is
  • Creating a policy
  • Uploading an existing policy
  • Writing a policy the AI can enforce
  • Scoping a policy to specific entities
  • How policy enforcement works
  • Asking about a policy
  • Expense categories vs. policies
  • Reviewing and updating policies
  • Related articles

An expense policy tells Light's AI what your company will and won't reimburse, so it can review submitted expense reports automatically instead of routing everything to a person.

What an expense policy is

In Light, an expense policy is a written document, not a set of toggles or configured dollar limits. You write the rules in plain language, and Light's AI reads that text every time it reviews a submitted expense report. Each policy has three fields:

  • Title: a descriptive name, such as "Travel Policy" or "Meal Policy."
  • Content: the full policy text, written in the rich text editor.
  • Entities: the company entities the policy applies to.

Because the AI interprets the text directly, a clearly written policy leads to a more reliable automated review. A vague policy gives the AI less to check against, and more reports end up flagged for manual review.

Policies live on the same settings page as other company policies. See Company Policies for the full walkthrough of creating, editing, and managing policies in Light.

Creating a policy

  1. Open the Light app and go to Settings (gear icon) → Guardrails → Policies.

  2. Click Create policy.

  3. Fill in the fields:

    • Entities: the entities this policy applies to.
    • Title: a descriptive name.
    • Content: the policy rules, written in plain language.

  4. Click Save, or Cancel to discard and go back.

Uploading an existing policy

If your company already has a written expense policy, upload it instead of retyping it.

  1. Open the Light app and go to Settings (gear icon) → Guardrails → Policies.
  2. Click Upload.
  3. Select the document from your computer.
  4. Light's AI parses the file and creates a policy with the title, content, and entities pulled from it. Review the result and adjust anything before saving, or click Cancel to back out.

Writing a policy the AI can enforce

The AI reviews your policy text the same way a person would. It can only enforce what's actually written down, so specific, numeric rules give it a clear basis for judging a submitted report. For example:

  • "Meals are reimbursable up to $75 per person per meal."
  • "Hotel stays should not exceed $200 per night in standard locations."
  • "Alcohol, entertainment, and personal care expenses are not reimbursable."
  • "All expenses require an itemised receipt and a business purpose."
  • "Air travel should be booked in economy class."

Vague language, such as "reasonable amounts" or "within reason," gives the AI less to work with, and pushes more reports into manual review than a specific rule would.

Scoping a policy to specific entities

If your company has multiple entities, subsidiaries, or regions, each one can run its own set of rules. Set this with the Entities field when creating or editing a policy. A policy only applies to the entities selected there, so different parts of the business can have different spending rules under the same account.

How policy enforcement works

Enforcement happens inside the Expense reimbursement workflow, on the step that runs the AI's compliance check. That step is labelled Review expense report.

  1. An employee submits an expense report.
  2. The Review expense report step checks it against whichever policies are selected on that step.
  3. Compliant reports are approved automatically.
  4. Non-compliant reports are sent to the inbox for a person to review. The AI's flag doesn't block the expense. A reviewer sees the AI's assessment and decides whether to approve or reject it.

To choose which policies the AI checks against, open Settings (gear icon) → Workflows, edit the Expense reimbursement workflow, and select the policies on the Review expense report step.

Asking about a policy

Employees can ask Light's AI assistant for a rule directly instead of searching the document, for example: "What's the meal limit for business travel?" The assistant answers from the policy content you've written.

Expense categories vs. policies

Expense (reimbursement) categories are a separate setting from policies, and control something different. A category decides how an expense is coded for accounting. It has a Category name, an Account (the GL account), a tax code, optional Context for the AI, and entity assignments. Configure categories at Settings (gear icon) → Records → Reimbursement category.

Policies decide whether an expense is allowed. Categories decide how an allowed expense gets booked. Both feed into the same Expense reimbursement workflow, but you configure and edit them independently.

Reviewing and updating policies

Treat a policy as something you maintain, not a one-time setup step.

  1. Check how often reports are flagged as non-compliant, and why.
  2. Decide whether the written rules are too strict, too loose, or just unclear to the AI.
  3. Update the policy content in the editor.
  4. Tell employees about the change. The AI only enforces what's currently written, so an unannounced update can catch people out.

To delete a policy you no longer need, hover over its row in the policy list and click the trash icon. Light asks you to confirm before removing it, since this can't be undone.

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