Expense Reimbursement – 6 key ways you could manage it better
Here are six things you need to know about expense reimbursement and expense management to help you save time, money, and give you real-time control over your business spending.
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The amount of paperwork they create is extremely time-consuming for finance teams and unfair to employees expecting prompt and total expense reimbursement.
Here are six things you need to know about expense reimbursement and expense management to help you save time, money, and give you real-time control over your business spending.
How improving your expense reimbursement process can save you hundreds of pounds each month
1. What qualifies for expense reimbursement?
To understand which expenses full-time employees across the UK are claiming for and how often, we surveyed 2,500 people – and the results were telling.
Over a third (38%) admitted to claiming for things that they shouldn’t, with 5% saying that they submit false or altered claims frequently. Many claim mileage (not) driven, drinks at the pub and meals with family and friends.
It’s important you know exactly what expenses employees can claim: for tax purposes, only expenses that have been incurred in favour of running the business should be allowable. Specifically, when employees are actually performing business tasks or trying to attract more business (e.g. client meetings). You can find a clear list of allowable employee expenses on the Financial Ombudsman Service website.
If you don’t make this clear to your people, you risk ending up with hundreds of pounds worth of fraudulent claims each month.
2. Delayed expense reimbursement can be costly
In our survey, over half (57%) said they are owed money by their company, largely due to lost receipts, and because they pay out of pocket for work items and other small purchases such as stamps and bus fares.
And if keeping receipts takes too much effort and managing expenses via Excel is a thing of the past, you need to modernise your expense management process.
Most responders (65%) told us they are comfortable using a company card – and most think they would spend less if the company strictly enforced their expenses policy.
This tells us that trusting your staff with a card that you can control is a better option. You can empower your staff while staying on top of their spending – and the finance team doesn’t have to waste time rummaging through receipts. Everybody wins.
3. Stop out-of-pocket expense payments
There are many downsides to asking your people to pay for what they need up front, without your help.
First, you’re making it very difficult for your finance team and employees to manually track, and report every cash and out-of-pocket expense. Then, you’re asking your finance team to go through receipts, invoices, credit card statements, and account claims to reimburse these expenses.
It’s not just a tedious task – at the end of the month, that’s valuable time lost to trying to sort out a cat’s cradle of admin work.
Second, HMRC says you must keep a record of all expenses and show that your reports and end-of-year forms are accurate. You must keep these records for three years from the end of the tax year they relate to.
Which is why you need a smarter way to manage spending.
4. Find an expense reimbursement system for real-time visibility
An expense management platform such as Soldo gives you complete control over every aspect of the company spending cycle.
With a combination of an easy-to-use web console, a mobile app and prepaid business cards, you can see the whole process in a new light – from purchase to reporting.
Setting up your web dashboard is easy, and from there an admin can load your prepaid cards with money and distribute them to your team. When a card is used, managers can track every expense in real time.
No more phantom costs. An expense management system lets you monitor and analyse company-wide spending so that nothing takes you by surprise.
5. Set firm expense reimbursement policies to empower employees
Soldo allows you to redefine allowable expenses and set up a series of rules to control each employee card according to how much, where and when they are allowed to spend.
This gives your staff confidence to spend. They don’t need to remember the terms of your expense policy every time they need to buy something, and they don’t have to police themselves.
Through the mobile app, they can check their available balance. If they need more, an admin can top up their card instantly. And there’s no risk of overspending.
6. Save hours of admin with seamless expense accounting
Chasing receipts, entering receipt data manually into a spreadsheet and filling out forms for each transaction are archaic, time-consuming tasks. They also prevent your finance team from tending to other, more urgent parts of the business.
If employees need to purchase something, they can snap a photo of the receipt and upload it to the Soldo mobile app. The finance team gets the information they need immediately. And if they don’t, they can set up time limits and alerts to remind those who forget.
To make things better, you can integrate Soldo with your accounting system and automatically import transactions and expense details. Reconciliation only takes a click.
When put together, you can also produce more precise reports and cash flow projections – which will help you make smarter spending decisions in the future.
7. Take the pain out of spending with Soldo
Finance teams spend far too much time going through expense reimbursement reports. Expense management doesn’t have to be a headache.
Prepaid cards make life a lot easier for your people while at the same time giving you a far more accurate idea as to what is being spent and why.
Soldo lets you customise budgets, set spending limits and apply expense policies. Employees pay for whatever they need with their Soldo card and it will generate expense reports automatically.
It’s simple, effortless, and you can put all that saved time to good use.
