When employees incur expenses while carrying out tasks for their business, they expect to be reimbursed for those costs. Taking care of this task will motivate your employees to complete their work promptly, as they trust that your organization will treat them fairly. However, creating an efficient expense management system requires bringing together different components of your business operations.
With the right plan and proper tools, you can provide significant value to your business. Let's take a look at what you should know about business expense reimbursements.
Why Streamlining Business Expense Reimbursement is Crucial
Creating an efficient process for handling employee expenses has long-reaching impacts on your overall business operations. Let's look at a few of the benefits you will experience:
Improved employee satisfaction. Your employees will feel confident that you will take care of them if they need to incur expenses on behalf of the company. Quick reimbursement relieves any financial stress they might experience because of the expenses.
Improved financial accuracy. Having a smooth process also reduces the possibility of financial errors, such as inaccurate budgets for the company because you have not correctly accounted for all your expenses. This improved level of accuracy improves your overall control over your incurred expenses, so you know what you have room for in the budget.
Improved tax compliance. Finally, better records will ensure your business is prepared to pay any taxes incurred as a result of these expenses. Poor records can quickly result in accounting problems that get compounded with inaccurate taxes and legal ramifications. Bookkeeping needs to be a critical priority for every business.
Best Practices for Accurate Expense Reporting
To implement this improved expense reporting, you should focus on three main steps, which are expense management best practices.
Step one. Establish clear policies and guidelines. Write out your policies describing precisely what expenses will be reimbursed, including expense type and the applicable circumstances. Then, establish how employees will submit their employee expense reimbursement requests.
Step two. Create the standardized forms your employees will use to document their expenses and submit them for reimbursement. Determine the types of documentation you will accept, such as a receipt, bill, or credit card statement.
Step three. Provide employee training and clear communication. Provide employees with instructions and training about how they are to submit for their reimbursements. Give them opportunities to practice walking through the process.
Timeliness in Processing Reimbursements
Prioritizing timeliness is critical to cleaning up your expense reporting procedures. For the process to move smoothly, you want everyone involved on the same page about the expected timeline.
Establish submission deadlines for your reimbursements. The deadline encourages people to keep their information organized and places the reimbursement process higher on their to-do list.
Once your employees turn in their requests, provide deadlines for those in charge of reviewing them. These deadlines give your employees a concrete expectation about when they should hear your decision, so they do not have to wonder or follow up themselves. They also encourage those managing the process to keep everything moving forward effectively.
Finally, take advantage of technology when the opportunities arrive. Using digital submission request tools that simplify the process and ensure everyone gets the proper reimbursement will help build a more efficient workplace.
Ensuring Compliance with Regulations
As a business, you also need to stay compliant with all the relevant taxes. Tracking your business expenses, including how much you spend on reimbursement requests and where the money specifically goes, is critical.
Maintaining accurate records and regularly auditing and reviewing your internal processes can help ensure you keep your business compliant and ready for any external review process.
Utilizing Technology for Streamlined Processes
As you begin to improve your reimbursement request steps, you will likely find that technology can help.
Expense management software offers user-friendly ways to better track your business expenses. You will electronically note where your money ends up and the types of expenses you have covered. When it integrates with the rest of your payroll system, you will be able to track all your payments in one place.
The benefits of this type of system can easily be seen when you look at the success of the Surgery Center at Hamilton with Payday. This medical business was looking to improve their overall business efficiency and cost savings. Working with Payday, which helps to integrate a suite of services with the expense management system, allowed them to trim their annual expenses and improve their overall business HR operations.
Get Started with Your Expense Management Today
Managing expenses is a key business responsibility, including tracking and paying out any necessary employee reimbursements. Staying on top of these payments not only improves employee morale and creates a better work environment, but it also helps companies improve their compliance measures.
Building a system that will improve your expense management calls for a careful review of what an efficient expense processing system should look and what types of tools can help you achieve your goals. Payday brings together an expense management system that helps streamline what companies need to improve their processes. It has far-reaching impacts on all aspects of business operations, from improved HR to cost savings and improved employee satisfaction.
Explore Payday’s Expense Management Solutions to streamline your business expense reimbursement processes and ensure reimbursement compliance.