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What’s the best expense reimbursement method?

The best expense reimbursement methods pay back expenses to employees quickly and accurately. Expenses reimbursement means that companies pay employees back when they spend their own money on business-related purchases such as hotel bills, client dinners and fuel. Usually there is an expense claim process: employees keep receipts and record expenses on a form, or via an app, which is approved before repayment is made.

Often methods have involved paper forms and paper receipts, with a monthly deadline for expense submission and a fixed payment date some days or weeks afterwards. This old-fashioned approach has drawbacks: written forms can be illegible, paper receipts are easily lost, it’s time-consuming for employees to write out the justification for each expense and to group them together in project or cost codes. Paper-based approvals can only take place in the office so it can take a long time to get authorisation, if managers are not available. This slows repayment times.

Repayment to employees directly into their bank accounts via BACS or Direct Debit is an efficient method of reimbursement. Cheque payments are virtually obsolete these days, while cash repayment is resource-intensive and can pose a security and fraud risk.

Some organisations provide corporate credit cards that employees use to pay for business and travel expenses. The balances may be repaid directly by the company, so the employee is never out of pocket. The employee must still provide receipts and information about the expenditure, so the expenses or finance team can check that it is allowable.

Today, the best expenses reimbursement methods use technology applications with extensive automation capabilities. These make the process quick and intuitive for employees as well as resource-efficient and compliant for finance teams. The benefits of adopting an expense management application that’s central to your business travel and expense policies and procedures include:

  • Smart optical character recognition (OCR) technology to scan receipts on the go via mobile phones, eliminating manual data entry and enabling line-by-line expense submission rather than relying on employees to complete monthly expense reports
  • By capturing expenses so easily, it’s easy for employees to keep a track of receipts and encourages submission at the point of purchase
  • Mobile platforms mean that managers can review and approve expenses on the go, speeding up the reimbursement time
  • Small expenses may be automatically approved and reimbursed, maximising efficiency and reducing manual processing
  • For finance teams, these applications automatically capture important tax and compliance data such as merchant, date, price and tax details
  • This enables faster reimbursement to employees removing much of the pain and frustration around expense management

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