Learn best practices for expense reimbursement management and reporting, and how to create efficient processes for employees and accountants to limit time spent managing expenses. By FINSYNC If you ask an administrator what part of their job they enjoy the least, there’s a good chance they’ll say managing expense reimbursements. What could be more tedious and time-consuming than sorting through piles of paper receipts, cutting checks and tracking payment processing? What about reimbursement disputes or the difficulty of simply getting sales reps to properly file an expense report? We’re here to help. In this article, we’ll show you how to manage reimbursement efficiently and how to keep track of expense reports. You’ll also learn expense management best practices and the best way to deal with expense reimbursements.
What is Expense Reimbursement Management?Expense reimbursement management is the process in which an organization reimburses or “pays back” an employee for out-of-pocket business-related expenses, like treating a client to dinner, or the cost of airfare to a business convention. Expense reimbursement, though simple in principle, is seldom easy. It’s a complicated process that can be as difficult to track as it is to define. Every company has a different expense reimbursement policy with varying criteria for what is considered a business expense. For example, most travel related expenses like flights, hotels and meals are considered business-related and therefore eligible for reimbursement, but only if incurred while performing duties on behalf of the company. For this reason it is incredibly important that companies not only clearly define their expense management policy, but also implement a method to efficiently manage expense reimbursements.
How to Keep Track of Work Expenses?The majority of businesses track work expenses via an internal system which employees use to report their expenses for reimbursement. For example, an employee who travels from New York to Chicago to meet a client may submit his travel expenses for reimbursement by filing specific paperwork and his original receipts with the HR/finance department for review. This is an archaic process that’s plagued by human error and generates mountains of paperwork that someone has to get paid to process. Thankfully, there are several ways to efficiently manage expense reimbursement.
Expense Management Best PracticesTo manage expense reimbursement efficiently, a business must ensure a seamless expense management process via a precise and timely reporting system. In other words, you need to make it as easy as possible for your employees to submit their expenses for reimbursement. Here are the best practices for efficient reimbursement management that you can implement to improve the process and minimize unwanted costs.
Clearly Define Your Expense Management Policy
Make it Easy to Submit Expense Reports
Implement an On-Time Payment Mechanism