We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Spending Policy?

Malcolm Tatum
Updated Feb 04, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A spending policy is a logical and organized plan of action that is used to determine how available resources are spent. A policy of this type is often employed by governments as well as businesses, and aids in the process of controlling spending. Development of a viable spending policy is crucial to the ongoing operation of a business, since it helps to ensure the goods and services needed to operate are on hand and that money is not being wasted on non-essentials.

When putting together a company spending policy, it is important to identify not only what type of expenditures are necessary for the ongoing operation, but also to prioritize those expenditures so that goods are purchased in a timely manner. Doing so has several benefits for the business. By scheduling spending according to specific purchasing guidelines, it is possible to keep inventories within reasonable limits and avoid paying taxes on goods that languish in storage for long periods of time. In addition, the establishment of spending rules that control the process of spending will mean that resources are on hand to deal with unanticipated issues, rather than being tied up in existing inventory.

Writing a spending policy is very much like writing a budget, in that it is necessary to determine the types of purchases needed, when those purchases should take place, and the quantities that may be permitted with the purchase of each good or service. Many companies operate a purchasing department that is responsible for making sure the spending policy is observed. This often translates into a structure in which departments submit requisitions for necessary goods for review by a purchasing agent. The agent evaluates the requisition, and if approved assigns a purchase order to the request and authorizes the placement of the order. This approach makes it easier to process payments to suppliers and to track those expenditures in light of the budget set for each department within the company structure.

At its best, a spending policy makes it possible for a business to make the most prudent use of its financial resources, ultimately resulting in the production of goods and services that are sold to customers and generate revenue. When a spending policy is incomplete or poorlyyes defined, the chances of keeping expenses within reason and increasing the bottom line of the company are decreased significantly, sometimes to the point of causing the business to fail.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum , Writer
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGEEK, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Discussion Comments

Malcolm Tatum

Malcolm Tatum


Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Read more
WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.