When an employee pays out-of-pocket for business-related meals or travel, an employer should want to reimburse them as quickly, efficiently, and accurately as possible. Employee business expense reimbursement is vital if you want to retain them and keep them happy. Fortunately, modern expense reimbursement tools can help make the process as painless as possible. In this post, we'll cover some of the challenges of traditional reimbursement methods, ways to make the process more efficient, best practices for expense reimbursement, and more.
Challenges of Traditional Expense Reimbursement Methods
Processing business expenses in the traditional models presents several challenges for organizations. Saving receipts and manual data entry are time-consuming and prone to errors. Any accountant will tell you that under older reimbursement models, they have to spend a tremendous amount of time reconciling expense claims. This also opens the door to human error and delays in reimbursements.
The goal of a system should be to reimburse employees as quickly as possible for out-of-pocket expenses while minimizing the risks of human error and delays. Managing receipts and expense budgets is extremely challenging in a paper system. Traditional models of expense reimbursements are also limited in how an organization can conduct data analytics on expenses.
Best Practices for Processing Employee Business Expenses
When setting best practices for employee reimbursement, establish a clear and strong policy that every employee understands. Each employee should know what is allowed as a reimbursable item and what is not.
Use a central human capital management (HCM) system that all employees have access to and where they can record and submit receipts electronically. Set a standardized documentation and submission process, and ensure timely review and approval of paying employees back. Check itemized receipts from employees to ensure the amounts match reimbursement requests. Perform audits regularly to check for errors or fraud, and to hold everyone to the same standards.
Tools and Technologies for Expense Reimbursement
Payday provides an easy-to-use employee expense management module that integrates directly with payroll systems. Employees can record and upload their receipts directly in our employee self-service kiosk. Expenses can then be quickly reviewed and approved or rejected. If an expense is approved, the funds can be added directly to an employee's next upcoming paycheck.
Integrating your expense management system with payroll will save time and reduce the risk of errors.
Ensuring Accuracy in Expense Reimbursement
Accurate documentation and recordkeeping regarding travel and meal expense management is important for two reasons. It keeps the employees honest about getting reimbursed for travel, meals, or other approved expenses. You also want to ensure that your employees are paid the correct amount for reimbursement. Poor recordkeeping that results in an employee being underpaid for expenses can be devastating to morale.
Automated expense tracking and reporting in a central location helps with accuracy and keeps everyone on the same page.
Speeding Up the Reimbursement Process
Allowing employees to record and submit expenses through a mobile app eliminates the need for paper on both ends. It's also much faster and easier for them since they don't have to carry paper receipts back and submit them to HR. Leveraging the right mobile app allows for on-the-go submission of receipts.
It's important to set up fast approval workflows when it comes to receipts. This is easy to do with Payday's HCM system. Our system can directly integrate with your payroll system so that the process for submission and approval is automated as a regular payroll function.
Enhancing Employee Satisfaction through Efficient Reimbursement
Employees should be able to trust that they will be paid back fully, accurately, and promptly. They are spending their own money to benefit your organization's business, so reimbursing them should be a top priority. It's easy to see how employee morale can be damaged if they are not paid back quickly or accurately.
An efficient reimbursement system is also going to reduce administrative burdens on employees and your HR and payroll teams. Submitting receipts and checking them is a redundant task that can be made much easier with the help of the right tools.
Speed and Accuracy in Expense Reimbursement with Payday
Traditional expense management methods are less efficient and more prone to errors or fraud. Using a mobile app for on-the-go submission and approval of receipts ensures speed and accuracy. It builds morale and trust with employees when they are quickly reimbursed for business-related expenses.