Top 4 expense reimbursement policy practicesWeladee
Now that we understand why it’s beneficial to have expenses policies, how can we craft an effective one? Going forward, we will discuss some of the best practices when it comes to expense policies. This will help finance teams resolve issues quicker, have a better turnaround time, and gain greater control over compliance. Let’s dive in!
Clearly outline your expense reimbursement process
A clear procedure of the process is needed to make sure your employees understand the value of your policy. This will also ensure employees do their tasks on time and don’t go long without being reimbursed.
An employee may also put off reporting expenses on time because they find it either confusing, tedious, or an anxiety-provoking task. This can lead to last-minute submissions and additional tasks for the finance team.
But when an employee understands what comes next, it leads to a smoother and on-time expense reporting process. The employee is also more confident about timely reimbursements. This also motivates employees to take on tasks that require business travel.
Set clear rules and responsibilities
When you’re entrusting employees to spend money on behalf of the company, it’s important to layout guidelines that set limits. Use policies to define the duties and responsibilities of both employees and employers.
Doing so allows the finance team to take action quicker in case of any issue or dispute. Also, employees can understand what’s expected of them, thus increasing compliance.
Constantly update your expense policy
The policy that worked a year ago might not work the same way today.
Expense policies should be tweaked and updated per the need and the nature of your business. The IRS also updates its standard rates and guidelines for reimbursement every year. Ensure your company is aligned with these new rules and laws to avoid unnecessary taxation on business expenses.
Make sure you have a centralized tool like Weladee to check all information related to travel and expense reimbursements. This allows for:
- Visibility into metrics around category-wise budgets and corresponding spending trends of your traveling employees.
- Once the finance team understands the spending patterns; the company can make tweaks and changes to their policies accordingly.
- Both the employees and employers can view the changes in the reimbursement status once an expense has been filled. This keeps all stakeholders in the loop.
- Employees are encouraged to be more accountable as all their spending is reported and recorded.