Efficient expense reimbursement is critical for managers not to overlook. Reimbursement in employment or business that occurs quickly boosts morale and trust within the organization and its business partners. Furthermore, the reduction in administrative duties is lessened, simultaneously removing another duty to pay the expense reimbursement. 

Think of it like having extra chores looming around. Efficiency in documenting and closing the reimbursement process cases enhances compliance and transparency and improves vendor and employee-to-management relationships. 

In short, implementing an efficient expense reimbursement system is key to good financial management.

In this article, we’re going to jump right into the expense reimbursement process, how you can implement systems to improve your processes, and some simple tricks you may not have considered to aid you on this journey to make your job easier. Let’s get started.

Understanding Expense Reimbursement

Expense reimbursement is a fairly common method by which companies back employees or contractors who spend their own money on business-related expenses. You might come across this scenario during travel for the business, grabbing emergency office supplies or even personal protective equipment.

Effective management of company expense reimbursement often comes in the form of an included policy outlined in a company manual or role SOPs (Standard Operating Procedure).

Industry Example Scenarios

Utilities

In the utility sector, team members are often on the road. Traveling around from site to site for maintenance, repairs to damaged equipment, and other such things can spring up quickly. If a crew member has a shortage of one thing or another, they might have to stop and pick something up along the way to be more efficient.

Construction

Working in construction has a number of demands, one of which is often to think quickly in urgent or surprise situations. If a construction site is off the beaten path, it might be more efficient for crews to stop at a local supply store to reload rather than travel all the way back to home base.

Security

Security personnel may require special training or work as mobile units. There are several scenarios where expense reimbursement can creep up. The best thing to do to handle the process is to understand how it will transpire, how it needs to be handled, and how you can close reimbursement cases quickly and efficiently to ensure ease of the process.

The Role of Managers in Expense Reimbursement

As a manager, you have a special set of skills and responsibilities that need to align with your company’s reimbursement policy and process. Furthermore, your responsibility to the company and those you oversee cannot be overstated. 

In most companies that have documented reimbursement policies, the manager is typically responsible for a few critical aspects of the reimbursement process:

Documentation and Policy Enforcement

You need to ensure that reimbursement forms are completed and that they adhere to your organizational reimbursement policies. To simplify the matter, you should create a clear and concise policy of what is or is not acceptable for reimbursement. 

Communication and Training

Once you have your reimbursement policies documented, it’s best to communicate those policies to all affected stakeholders.

Review and Approval

Management needs to have a smooth approval process. The last thing you want is to sit at your desk mulling over receipts and paperwork. Sure, a certain amount of paperwork is to be expected, but the sooner you can close out reimbursement cases, the better.

Reimbursement and Its Impacts on Financial Management

Budgeting and Cash Flow Management

Expense reimbursements are an outflow of cash. For a small or even medium-sized business, poor reimbursement practices can severely disrupt a company’s cash flow. As an operational expense, reimbursements must hold a place in operational budgets. Therefore, mismanagement can cause some fairly dire scenarios we’re sure you’d like to avoid.

Financial Reporting and Compliance

There’s more at stake than merely paying back employees or contractors for out-of-pocket expenses. You must consider that even petty cash expenses need a proactive receipt collection and documentation process. Accounting for every dollar spent helps organizations keep a handle on the tax they have to pay. Furthermore, should an audit of the organization’s finances become necessary, even the petty expenses have to be accounted for compliance.

Team member and Contractor Retention

Timely and accurate reimbursement contributes to team member satisfaction, which can impact productivity and retention. It signals that the company values its employees and is committed to maintaining a supportive work environment.

Preventing Fraud and Unnecessary Expenses

Earlier, we mentioned how you should have clear and concise reimbursement policies in place. Furthermore, you need to train your team members, employees or otherwise, to adhere to said policies. Through a robust training regimen, you can easily keep your team abreast of the latest in organizational policy.

Did you know that, according to USA Today, the average adult in the USA spends $1497 per month on non-essential items? It’s baked into us to spend. Considering this fact, it stands to reason that the odd time your team members might inadvertently slip into the spending trap and buy an item for reimbursement that, well, they really didn’t need.

How do you control unnecessary spending? We’ve got a great solution, and it’s going to save you time and money, not just with reimbursements but with everything (well, a whole lot of things, at least). Let me introduce you to 1st Reporting.

Leveraging Technology for Expense Reimbursement: 1st Reporting App

Mobile form automation software is changing the way organizations do business, and 1st Reporting is at the front of that movement.

1st Reporting is a mobile application for creating, completing, and managing reports and forms. It’s mobile, so it works on both Android and iOS devices. It’s powerful and works on laptops, tablets, and desktop computers. In fact, it even works with Microsoft Teams®.

Within the 1st Reporting app, you’ll find a library of templates applicable to your operations. Furthermore, you’ll also find a robust form builder that enables you to create custom forms, checklists, and reports for use by you and your team.

The application also has a noteworthy automated notification feature, providing you with a means to receive a notification the moment your team member completes a form, like the expense reimbursement template, in the field.

Gain Insight Into Who Is Completing Reports (And Where)

Utilizing the 1st Reporting application for things like daily vehicle walk-around inspections, injury incident reports, site inspections, or any other reporting need helps drive insight. You see, our platform takes advantage of GPS technology and the power of computational analysis. So, not only can you clearly see where each report or form was completed in the field on a map, but you also have the ability to run reports based on reports submitted.

Imagine that you can run a report at the end of the year and know who completed the most reimbursement forms. Or who submitted the most incidents, or what were the most predominant incidents? The point is that never before in history. Have you had such control of the metrics behind your organization’s processes, like the reimbursement process?

You can use 1st Reporting for much more than reimbursements, as you’ll see when logging into our app. With a robust and customizable map window on your dashboard, you’ll see why adding a touch of GPS to your forms remittance process adds a whole new dimension to your operations management. But don’t take our word for it. You should try 1st Reporting for yourself and see why we’re the industry standard for professional organizations.