Employee reimbursement: a guide to efficient expense management

Most businesses rely on employees to handle and manage a certain level of responsibility when it comes to business expenses. Sometimes employees need to make purchases and spend money to perform their duties. And when owners and managers need to reimburse employee expenses, it is important that there is a plan in place. It is our hope to help remove some of the confusion and misconceptions surrounding employee reimbursements and to help you better plan and manage this critical part of business operations.

Check out this on-demand webinar to find out more about improving employee experience in a cost-of-living crisis. 

What is employee expense reimbursement?

First, you need to know what business expense reimbursements are and why they are so important to business management and financial planning. In their most simplistic form, these are reimbursements employers give to their employees to help cover business-related expenses that were incurred during authorized business operations. But what exactly counts as employee business expenses? According to the authorities, here are some examples of what can be included in your policies and procedures as reimbursable expenses:

• Business-related travel expenses and costs
• Approved or required education or training
• Business supplies, office supplies, and materials
• Business tools and hardware/software
• Miscellaneous business-related expenses

It is important that you understand how these expenses play into the day-to-day operations of your business and how they can help you save money. Knowing to what extent your employees are covering costs and how you can help offset that burden goes a long way in keeping productivity levels high. Clear guidelines for what can be reimbursed and quick payment processes will keep employer-employee relations in good standing.

Travel and Expense Management - Understanding Reimbursement Options

One of the most common reimbursement claims filed by employees is travel expenses. As a business owner or leader, you want your employee reimbursement policy to align with T&E policies and legal regulations. You should be familiar with the most common methods of tracking and paying travel-related expenses. This will make it easier to understand how proper planning and organization make the process more manageable and streamlined.

There are various expense management software platforms available that allow employees to submit expense reports electronically. Managers can review and approve these reports; the software can integrate with accounting systems.

Business leaders can also use cloud-based systems to track employees' expenses and payments. With automated tracking, you can set up shared folders for employees to upload receipts, and they can use spreadsheet or document apps within these platforms to maintain records.

Managing Receipts and Documentation for Reimbursement Payments

What does reimbursement mean for your company or team? Our team recommends the following tips to help you attain straightforward and organized expense tracking:

• Implement a strong expense policy: Develop an inclusive expense policy and make sure all employees understand it to ensure everyone is on the same page with reimbursements.
   
• Use a centralized system: Set up a central all-access place for employees to log, report, and check their expense records for easy collaboration and fewer paper-trail-related issues.
   
• Check itemized receipts: Request employees record and submit receipts for all claims made and double check amounts match those being requested for reimbursement.
   
• Set clear expectations: There must be clear deadlines for receipts and reimbursement requests to ensure accurate tracking, less confusion, and fewer errors with payments.
   
• Perform audits periodically: Automated checks and audits can help ensure the accuracy of reports, prevent unethical behaviors, and keep everyone on the same page and held to the same standards.
   
• Monitor spending trends: Keep an eye on pending trends with digital tools and real-time monitoring to watch for usual spikes in employee claims or times of excessive spending.
   
• Integrate new technology: Integrate any new or existing expense tracking system with other departments to simplify data transfer and maintain accurate financial records.

By following these tips, employers can establish an organized and efficient expense tracking process, reducing the chances of financial discrepancies and making it easier to manage company finances.

Importance of Intelligent and Adaptable Expense Management for Employee Reimbursement and Monitoring

There are several benefits of an intelligent, automated, scalable, and easy-to-use solution. These include:

1. More extensive business spending control

Traditional employee reimbursement and financial management processes often provide only a disjointed or fragmented solution and are an overall inconsistent process for tracking and monitoring important data.

2. Improve compliance and reduce fraud

With business going global, and with such a focus on digital work, remote jobs and wide-spread collaborations, an up-to-date planning and management system is critical to meeting the demands of employee reimbursements.

3. Data-driven support for employers

A well-rounded financial and employee management solution offers employee and employer alike visibility, insights, customization, and control over the entire process, from recording expenses to ensuring payments are received.

4. Improves employee experience

Traditional employee reimbursements rely on cumbersome manual data entry of travel expenses, which is slow, prone to errors, and wastes employee time, whereas innovative tracking and payment methods are the exact opposite.

Whether the funds are used to purchase office supplies, travel to and from work, attend required training classes, or business-related food expenses, reimbursement is an important part of the puzzle. It is important that you understand the different types of employee reimbursements and how to account for them.

How to Build a Clear and Fair Framework for Reimbursement

Businesses across all industries will find there are times they need to reimburse employees for various expenses. Here at SAP Concur, we understand how complicated these processes can be as well as how integral they are to smooth operations and continued growth. Regardless of how you decide to reimburse employees, having an updated and integrated expense reimbursement policy is critical to smooth payments and accurate expense tracking.

Adopting an expense management solution like SAP Concur provides your company with near real-time data and takes advantage of AI to analyze transactions. SAP Concur allows businesses to see what they’re spending, improve compliance, and avoid possible blind spots in the budget. SAP Concur imagines a world where travel and expenses practically manage themselves, helping businesses run at their best every day. Contact us today to see how we can help make managing employee reimbursements easy and low-stress.