How to Simplify Employee Expense Reimbursement Process?
Many companies and startups continue to support the remote work model after the pandemic. They allow employees to work from home. At the same time, many organizations make employees engage in domestic and international travel with the aim of generating incremental revenue. Hence, employees perform their professional responsibilities in various work environments in the post-pandemic age.
Also, they incur various expenses according to their work environment. For instance, employees incur recurring work-from-home expenses like office supplies, internet charges, and business telephone bills. On the other hand, employees traveling for work have to spend money on essential business travel products and services like flights, hotels, ground transportation, and meals.
Every employee pays for these work-related expenses using their personal funds. Organizations reimburse various expenses incurred by employees based on the expense reports submitted by them. The finance team or HR team reimburses the employee-initiated expenses after reviewing and approving the expense claims elaborately.
Expense reimbursement delays often make employees experience stress and impact their overall performance. Hence, it becomes essential for businesses to maintain operational efficiency by simplifying, streamlining, and accelerating the employee expense reimbursement process. If our organization is exploring ways to streamline employee expense reimbursement, you should adopt these best practices.
9 Best Practices to Simplify and Streamline Employee Expense Reimbursement
1. Define Reimbursable and Non-Reimbursable Expenses
Employees incur a variety of expenses for work purposes. But employers reimburse only those employee-initiated expenses that benefit the business. Hence, you must clearly define the reimbursable and non-reimbursable expenses by setting policy guidelines. Employees can refer to the guidelines to avoid mistakes while creating expense reports and submit the expense reports in a timely way.
2. Keep Organizational Expense Policies Accessible
In addition to defining policy guidelines, you need to ensure that employees can access the policy seamlessly. It is always important to keep the policy document accessible on computers and mobile devices. Also, the policy must be accessed by employees over the internet across locations.
Hence, you should store the document in a cloud-based drive and allow employees to access it using communication tools provided by your company. At the same time, you can ensure policy compliance by implementing an expense management solution that recommends only in-policy products and services to employees.
3. Digitalize Expense Reporting
Paper-based receipts and expense reports make the expense reimbursement process lengthier and more complex. You cannot simplify the time-intensive process without eliminating paperwork. You should enable employees to submit digital expense reports along with receipts and invoices.
Employees can generate expense reports in minutes using the expense management platform implemented by your company. The software will generate automated expense reports by capturing scanned receipts.
4. Encourage Early Expense Report Submission
The finance team will need less time to review digital expense reports than manual expense reports. But they will still need time to review the expense reports elaborately to prevent policy violations and expense fraud. Hence, your finance team speeds up expense reimbursements only when employees submit expense reports early. Your policy guidelines must encourage employees to submit expense reports early. It is also important to specify the time period for the submission of expense reports.
5. Streamline Expense Claim Review and Approval
In addition to making employees submit expense claims early, you must make the finance team reimburse expenses in a specific duration. However, you must allow the finance team adequate time to detect policy violations, overspending, and expense fraud.
Also, the finance team can control ongoing costs only by reimbursing the exact amount. Hence, you must provide the finance team with software tools required to track, record, and audit employee-initiated expenses.
6. Support Online Expense Reimbursements
Along with accelerating expense report review, you need to ensure that the employee receives funds early. Your policies must instruct the finance team to transfer funds to the employee’s bank account immediately after reviewing and approving her expense claim.
Your finance team must transfer funds to the employee’s bank account quickly using direct bank transfers. However, it is also important for the approver to convey the reason for rejecting an expense claim clearly and quickly.
7. Provide Employees with Corporate Credit Cards
Corporate cards enable employees to make payments using the company’s funds instead of using their personal funds. Also, they keep business-related expenses incurred by employees from their regular paychecks.
At the same time, your finance team can review and expenses employee-initiated expenses more accurately based on corporate credit card statements. Hence, you can simplify employee expense reimbursements by providing employees with business credit cards.
8. Prevent Expense Reimbursement Fraud
While streamlining employee expense reimbursement, you must focus on eliminating revenue loss by preventing expense reimbursement fraud. Employees often execute expense fraud by submitting fictitious invoices or inflating expense amounts.
Hence, you should require employees to submit invoices or receipts that include the date and time of purchase along with the name and address of the vendor. Also, your policies must define consequences for expense fraud and punish employees by taking the appropriate action.
9. Track and Control Expenses
In addition to accelerating employee expense reimbursement, you must focus on eliminating unnecessary expenses and overspending. It becomes easier for you to track and evaluate employee-initiated expenses when the expense data are unified and centralized. You can get visibility to employee-initiated expenses only by implementing an expense management solution. The software will feature a dashboard that will enable you to view, track, and control expenses in a centralized location.
Your organization can keep employees motivated and satisfied by speeding up expense reimbursement. But you cannot streamline the multi-step process without automation. Your company should implement an expense management platform that helps employees submit expense claims effortlessly, and the finance team process expense claims quickly.
The expense management solution will help you control spending by preventing policy violations and expense fraud. Also, you can use the software to detect unnecessary expenses and prevent overspending by tracking and auditing employee-initiated expenses regularly. The right t&e software will help you save costs and resources in addition to automating the complex process end-to-end.