Expense Reimbursements: 5 Step Solution to Handle Business Expenses
March 1st, 2019 • Expense Management
Expense Reimbursement is one of those financial processes that every company has to handle but always seems way too much like busy work. Employees dislike it because they don’t want to be filling out forms, particularly when they’re just back from a business trip.
The finance team spends too much time on verifying data, processing claims, approving them, and paying the employee back. It’s something businesses need to take control over as it can lead to increased expenses when left unchecked, and everyone would be happy if it moved a lot faster.
What is expense reimbursement?
Expense reimbursement is the way businesses pay back their employees who have spent their own money on business-related expenses. While reimbursements for business travel is quite common, employees can also be reimbursed for education, healthcare, and other expenses incurred on behalf of the organization.
Here’s how to Implement an automated expense reimbursement process in 5 minutes
A workflow automation tool like Kissflow can help you design, map, and implement the employee expense reimbursement approval workflow with ease.
You can use drag-and-drop functionalities to create workflows to streamline your expense approval system. Here’s how you do it in Kissflow:
Create your form
The first step to designing a employee expense reimbursement payment workflow starts with creating the forms for capturing the expenses. You can create one from scratch, or use the pre-installed app in Kissflow. Employees can use this form to submit their car, gas, meals, healthcare or any expenses.
The form should create a unique id and capture basic information about the employee like name and department. Also, the date when the expense occurred, its category, and the amount spent, should also be captured. There should be an option to attach receipts for parking, gas, and tolls.
Design the workflow
Once the form is ready, you need to design the sequential path of tasks that need to be completed. Depending on your requirements, an employee expense reimbursement claim can be approved by the direct manager, the travel desk, or the finance team.
You can also have multiple levels of approvals. If you’re looking to automate approvals based on predefined criteria, this is the stage where you do it.
Once the workflow is ready, you can assign stakeholders and set permissions. Roles and responsibilities are assigned to individuals based on their tasks in the finance workflow. You can even provide role-based access to hide sensitive information.
Implement the process
After everything is set, you can publish the workflow. Employees can initiate instances of the workflow and submit their expenses for managers approval.
Improve the workflow
Once the system has been implemented and has run for a while, it collects enough data to give you insights into how these processes can be made faster and more efficient. You can find the time taken to submit reports, the average approval time, and other such information to improve the workflow’s efficiency.
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3 Types of Employee Expense Reimbursements
These are three types of reimbursements that are common in most organizations:
- Travel and Mileage Reimbursements
- Business Expense Reimbursements
- Healthcare Reimbursements
Travel and mileage reimbursements
Businesses deal with travel reimbursements when employees start making business trips. They can anticipate some expenses like air tickets and accommodation and book them beforehand.
But, there are a few expenses like cabs and meals that can only be paid during the trip. Even though businesses usually provide a per diem allowance for such expenses, employees end up incurring some of these incidental expenses.
In the case of a business meeting or an event in the same city, it’s easier for employees to use their personal vehicles rather than getting the organization to arrange transport for them. In such cases, the employees can claim mileage reimbursements for the money they spend on gas.
Business expense reimbursements
Sometimes, employees pay for office supplies, a meal with a business partner, or a training program that helps them do their jobs better. These are technically business expenses and eligible for reimbursement.
These reimbursements are usually not considered wages and so they are non-taxable for the employee.
Businesses offer employee benefits like Health Reimbursement Account (HRA) and Flexible Spending Account (FSA) which are essentially medical reimbursements. These are often employer-funded, tax-advantaged benefit plans that let businesses reimburse their employees for money they spend on treatment, health premiums, and other qualified medical expenses.
Why automate expense reimbursement process?
Both employees and employers can benefit from reimbursements. Apart from the obvious tax benefits, there are several intangible benefits for both parties.
Paying for an educational course for employees encourages them to develop skills that can greatly benefit your business. Healthcare reimbursements show that you care about them. It increases loyalty and improves retention.
Keeping track of reimbursements also helps you control expenditures. You can identify areas where employees are spending unnecessarily and make insightful decisions that help you cut down on costs.
The best way to handle employee expense reimbursements
Workflow automation, of course!
While a dedicated expense reimbursement system seems the most obvious choice, there’s no one-size-fits-all solution. You need an expense reimbursement app that lets you completely customize the process based on your unique business requirements; a system that accommodates and enforces your expense policies.
With an off-the-shelf solution, you have to work around the existing structure to accommodate your workflows. That defeats the very purpose of paying top money for a dedicated employee reimbursement system.
With a workflow automation tool like KiSSFLOW, you can easily create customized employee travel request forms based on your needs. It lets you have complete control over the reimbursement process and helps you easily identify fraudulent claims.
It gives you the flexibility to add more details as you grow. You can even automatically approve claims based on certain criteria. Easy, right?
Take KiSSFLOW for a whirl and see how your reimbursements become a breeze. Try free for 14 days.