We are all familiar with the term ‘expense reimbursement’. Almost all companies, from startups to large corporations, include expense reimbursement as part of their document management processes. For accountants and finance teams, managing expense reimbursements requires thorough attention to prevent losses for the company and its employees. This article will discuss several methods that accountants and finance teams can utilize to manage employee expense reimbursements efficiently and effectively.
What is an Expense Reimbursement
Expense reimbursement is the process of payment or compensation from the company to the employee for expenses incurred while completing work-related tasks. The reimbursed amount must match the expenses incurred by the employee. Employees usually submit expense reimbursements in the form of invoices and receipts.
Types of Employee Reimbursable Expenses
1. Travel Expenses
Travel expenses are one of the most common types of employee reimbursement expenses. Many employees must travel for business purposes, such as attending conferences, events, meetings, or visiting clients. These activities incur costs that must be reimbursed by the company. Typically, these travel-related expenses include transportation costs, accommodation, meals, and communication expenses (such as mobile data plans or Wi-Fi).
2. Employee Meals
Meals are an important component of employee reimbursement. Employees who travel for business must eat and pay for their meals. They might have meals with a client or business partner, which usually occur over breakfast, lunch, or dinner. Besides that, we occasionally have to entertain clients or potential clients, including paying for meals, in order to build and maintain business relationships. Thus, these expenses are company responsibility.
3. Office supplies
Office supplies are a crucial component of business operations. When employees spend fees on essential office supplies while executing their job duties, it is important for companies to ensure that these expenses are reimbursed. Office supplies, such as stationery, printer ink, and others, are essential for employees’ daily activities. Remote employees, in particular, require office supplies for the task of setting up and maintaining a productive home office environment. When a company provides office supplies, employees do not have to worry about out-of-pocket spending for work-related supplies, allowing them to focus more on their tasks and responsibilities.
How to Manage Employee Reimbursements
1. Create Clear Policies and Procedures
This stage specifies the types of expenses that the company will reimburse, such as travel, meals, and office supplies, as well as the format of proof of purchase, such as receipts and invoices. In this step, the finance team can set up a budget for each expense category and establish a deadline for submitting expense reports.
2. Implement Tools or Software
Implementing tools or software for the employee expense reimbursement process helps the finance team by streamlining tasks such as collecting all reimbursement documents, automating policy compliance checks, and allowing employees to submit expenses quickly.
3. Conduct Audits Regularly
Monitor and audit expense reimbursements regularly to verify compliance with the company’s reimbursement policies and ensure all claims are within specified limits. Regular audits also help maintain cost-effectiveness and prevent misuse or waste of expenses.
Managing Employee Expense Reimbursement Effectively with Fintelite
In managing expense reimbursements, especially in handling large volumes of documents, accountants and finance teams require tools to streamline the process. Fintelite stands out as an ideal solution for automating employee expense reimbursements. Its OCR capability is 10x faster and 90% more accurate in extracting data from expense reports. Also, Fintelite integrates seamlessly with accounting platforms like Xero, Quickbooks, and Jurnal, enabling finance teams to improve the reimbursement process without requiring manual data entry.
With its advanced technology, Fintelite can detect instances of fraud or misuse in expense reports, such as duplicate claims, inflated expenses, or expenses unrelated to business purposes. This not only benefits the finance team but also the company, increasing productivity and lowering operational costs by up to 30% through automation, leading to reduced reliance on human labor.
You can experience Fintelite for free by trying the trial feature to see how it can benefit your business. Gain access to the full range of Fintelite products that accelerate not only expense reimbursements but also your entire document management process. If you want to tailor the product to your specific needs, you can consult with a Fintelite AI expert for free.
