Simplify Your Expense Reimbursement Process - A Simple Guide

Want to make the expense reimbursement process hassle-free? Read this guide and learn to make the expense reimbursement process easier.

Introduction

An expense reimbursement program allows employers to reimburse their employees for business expenses they incur. Expense reimbursements are a crucial part of accounting, allowing for tracking and reporting on a company's finances. These benefits can be particularly beneficial if a business is trying to save money on tax payments or recoup any losses employees make during their work.

Expense reimbursement is a lifeline for employees. It helps them to avoid spending money on their personal expenses while allowing them to balance the amount they spend with their employer-sponsored benefits and tax-related deductions. However, this process can be overwhelming for both employees and employers alike. Expense reimbursement policies can vary greatly depending on the industry and company size, making it difficult for HR professionals to implement an effective policy that suits everyone's needs. 

In this article, we will discuss how you can simplify your expense reimbursement process by implementing a few simple steps that will help streamline your reimbursements.

Why Do Companies Reimburse Expenses?

There are many reasons why a company would want to reimburse its workers for their business-related costs. It helps them control their spending habits, saves them from paying taxes on certain purchases, and gives them access to discounted services at local businesses through coupons or loyalty programs. A good reimbursement program should also encourage employees' creativity when it comes time to plan out how to best spend their allotted budget—giving people incentives like bonuses or prizes will make sure everyone feels invested in making those numbers add up each month.

While reimbursement programs can benefit the employer and the employees, they also carry certain drawbacks. For instance, if you're not careful about how much money you give out to your staff each month, it may be difficult to track where that money goes—especially if individuals are using their funds for personal expenses. There's also a chance that some people won't spend their budget wisely; if they do end up spending too much money on things unrelated to work, you may have a hard time getting it back from them later on down the line.

Finally, it's important to note that reimbursement programs aren't for everyone — many companies choose not to offer them as part of their benefits package because they're too expensive. 

Determine the Reimbursable Expenses 

Employee expense reimbursements are a great way to help employees manage their finances. While some expenses can be paid directly by the employer, others will require an employee to submit specific documentation for reimbursement. Here are some of the most common types of employee expense reimbursement:

  • Travel and accommodation reimbursements
  • Meals and entertainment reimbursements
  • Communication and office supplies reimbursement
  • Business Expense Reimbursement
  • Employee medical reimbursements

Travel and Accommodation Reimbursements

The most common expense type is travel and accommodation. You may want to set up your travel expenses reimbursement policy so that employees can submit reports within a certain timeframe to get a reimbursement for their expenses.

Once you have implemented the travel policy, monitoring and approving all expense reports is important. Employees who submit an expense report without approval will not be reimbursed for their expenses until a supervisor approves them.

It's also important to ensure that employees submit expense reports on time. Employees who submit a report after the deadline will not be reimbursed for their expenses until a supervisor approves it.

Meals and Entertainment Reimbursements

Meals and entertainment reimbursements include meals that employees eat while on travel for business. Entertainment is something that employees can use to enhance the work environment, like a performance or team-building exercise.

To get reimbursed for either type of meal or entertainment expense, you need to submit an invoice with receipts attached to it. As long as all parties involved agree to the expenses in advance (the client, coworker/colleague, etc.), there should be no problem getting reimbursed for these expenses. If you need clarification on whether you should submit an invoice for any particular expense, check with your HR professional first.

Communication and Office Supplies Reimbursements

Communication reimbursements are for expenses related to communication with customers, suppliers, partners, etc. These reimbursements are typically very straightforward as they can be categorized as calls and text charges or internet expenses if the job role is remote.

Office supplies reimbursements are for expenses related to office supplies (e.g., paper, pens, business cards). With this type of reimbursement, you have more freedom in categorizing the expense because there isn't a specific set of categories that need to be used for reporting purposes.

Business Expense Reimbursements

Business expense reimbursements are a great way to help your employees keep track of their business expenses and bills, as well as provide them with the ability to submit these expenses for reimbursement. All you need is a program that the employee can use to track their business expenses and then send the data over to you when it's time for reimbursement. 

By providing your employees with expense reimbursement apps, you allow them to enter receipts directly into their accounts so that they never forget about an important purchase again. Not only will this method help them stay organized, but it will also make it easier on your end too because you won't have any paperwork coming.

You can use this app to save all of your receipts and invoices, then send them over to your accountant or yourself so that you can see where the money is going. You can even set up reminders for yourself so that you never miss an important bill again. This will help keep track of your spending habits as well as make it easier for those who need reimbursement for business expenses.

Employee Medical Reimbursements

Employee medical reimbursements are medical expenses that employers cover for their employees. These reimbursements can be either in the form of cash payments or health insurance premiums. The goal of employee medical reimbursements is to help ensure that employees continue to receive quality healthcare, even if they have a difficult time paying for it themselves.

Employees can use this benefit in two ways:

  • They can use it to pay for medical expenses that are not covered by their health insurance. This can include deductibles, coinsurance, and copayments. It can also include any out-of-pocket costs that aren't covered by their insurance provider or employer's health plan.
  • Employees can use this benefit to pay for services that aren't covered by their employer's health plan or insurance providers, such as physiotherapy or vision care.

Introduce an Efficient Policy for Reimbursement

The first step to implementing an effective reimbursement policy is determining what you want your employees to do. For example, if you want them to seek reimbursement for all expenses, then include a clause about that in the policy. If you want people to ask for approval before they spend money on business expenses and then submit their receipts after the fact, then make sure that's clearly stated in your policy.

Next, think about whether or not it makes sense for everyone who works at your company to have access to this kind of information on their own time—or if only certain departments should be allowed access (such as finance).

Finally, consider how you're going to track compliance with these new rules: will there be annual audits? If so, who will conduct them? Or are there other ways in which this new policy can be enforced?

Once you've answered these questions, it's time to write your new policy. Keep in mind that the language used in an employee reimbursement policy is very important—so be sure to get input from other people within your organization who are familiar with such policies before making any final decisions.

Manage and Regulate the Approval Process for Your Expense Reports

The best way to organize and monitor your expense report approval process is by setting up a system of checks and balances. The first step in this process is to create an internal database that tracks all of your expenses. This database should include information on what the expense is, when it occurred, where it occurred, who was involved in the transaction, and how much money was spent.

Once you have this database set up, you should appoint an employee who would be responsible for entering transactions into it. This person should also be responsible for reviewing transactions before they are approved by management or an executive team member.

Finally, once a transaction has been approved by management or executive team members, it should be submitted to the accounting team for review by an accountant who can verify that the expense was legitimate and necessary for business operations.

The first step to simplifying your expense reimbursement process is to make sure you have a clear, straightforward system for tracking and approving expenses. It should include the following:

A method of easily recording expenses in the first place:

A designated person who approves or denies requests based on your company's policy (and who can also help employees go through the paperwork if they need it).

Next, you'll want to decide what kinds of expenses you will reimburse. Create a policy that outlines how much each type of expense could be worth, how often employees should submit them, and what kinds of documentation will be necessary. It's important that this policy is adaptable—it may need to change over time as costs fluctuate or new types of spending come up. Make sure every employee has access to this information at all times by printing off copies and posting them in common areas like break rooms and offices.

A way of keeping track of the expenses recorded:

Make sure that employees know how to submit expenses. If your company uses online expense management software, it should be easy to follow their directions and submit receipts. If you don't use a program like this, make sure employees know what information they need to include in their spreadsheet or notes app (date of purchase, amount spent, description of item).

You'll want to inform employees of how they will be reimbursed. This can be done through an email or memo sent out company-wide that outlines the policy and includes a link to where they can submit expenses.

Utilize Automated Handling of Expense Management

If you have employees who spend a lot of time on the road, a mobile app might be a good way to streamline your expense reimbursement process. By having an app that takes care of all the tedious tasks around submitting expenses and managing receipts, they can save time and focus on doing their jobs well. In general, this type of software is also more secure than manual methods because it doesn't require workers to enter sensitive or confidential information into public systems like email or text messages.

The tools offer one-click approval as well as built-in scanning capabilities so that employees don't have to worry about manually uploading images from their phone cameras. It also allows users who work remotely to access all relevant data through web browsers without having any additional software installed on their devices (which means less clutter).

These tools also have integrations with a wide variety of systems. This makes it easy for your team members to submit their expenses without having to re-enter all the data into another system.

Benefits of Having a Mobile App for Expense Management

Some benefits of using a mobile app for expense management are:

  • Having a mobile app for expense management can be a great way to save money and keep track of your spending. 
  • Mobile apps are convenient because you can access them on the go, and they're secure because they use the same technology as your bank account. 
  • You can use mobile apps to track your expenses, add new ones, and even set alerts so that you don't forget to pay. 

Conclusion

With an efficient reimbursement policy and automated handling, the expense reimbursement process can be made hassle-free. Especially a mobile app for expense management can provide various benefits, such as reducing the administrative burden on employees and improving the efficiency of tracking expenses. Zorp drag-and-drop app builder can help you create a simple and easy-to-use expense management app without writing a single line of code. All it takes is just a few clicks to get your own expense management app up and running.