Benefits of having a well-crafted Expense Reimbursement PolicyWeladee
Cuts off the repetitive back and forth
When you don’t have a solid expense policy, your employees are unaware of how much they can spend. They are also unclear on what type of business expenses are reimbursable or not. If not addressed, this can easily translate into extra work for your finance team.
The absence of policies leads to frequent inquiries and multiple violations.
But when you have a well-defined policy, it can answer doubts employees may have regarding the expense reporting process. As a result, the finance team does not have to spend hours explaining the policies to employees and correcting violations.
Most expenses incurred by an employee are reimbursable and tax-deductible. But to get this deduction, the company has to keep the right records per the Revenue Department rule.
An internal reimbursement policy can help everyone to be on the same page.
Additionally, employees are made aware of deductible business expenses and the time periods in which they must submit expense reports. Therefore, the reimbursement process becomes less taxing.
Curbs potential fraud
When your employees are unclear about the company’s expense reimbursement policies, they can intentionally or unintentionally overspend and commit fraud.
Loose policies allow room for assumptions and miscommunications.
A well-crafted reimbursement policy helps employees understand the whys and hows of company rules. The policy also highlights the consequences of breaking company policies. This ensures employees are careful with their expenses and expense reports, thus, increasing compliance.