Are your organization’s employees spending their own money on work-related purchases and taking longer than they should to get reimbursed? If so, you could be underestimating how much of an impact employee reimbursement has on your business.
Employee reimbursement is no longer just a form of accounting; it has developed into an important HR function that has a significant effect on employee satisfaction, trust, and compliance. Efficiently executed, employee reimbursement increases overall employee confidence and increases transparency within the organization.
With the accelerating pace of today’s business environment, organizations need to have structured reimbursement policies backed up with modern reimbursement software that provides speed, accuracy, and smoothly integrates with payroll software and HRMS systems.
What is Employee Reimbursement?
Employee reimbursement is a system in which employers repay employees for the costs associated with bringing their expenses back into the workplace. These expenses usually come in the form of travel, meals, internet, or tools needed to do their job.
A solid employee reimbursement policy allows employees to travel for business without financial stress. It helps companies keep records, maintain compliance and accuracy, and provide documentation needed for auditing purposes.
Many modern organisations also use automated employee reimbursement software solutions to facilitate the claim, approval, and payment processes. Automated employee reimbursement software generally interfaces with payroll and HRMS.
What are the Types of Employee Reimbursement?
1. Travel Expense Reimbursement
Employees may incur costs for travel while conducting company business, including the cost of transportation, lodging, and fuel.
Creating a structured travel expense reimbursement policy allows for timely reimbursement, clear tracking and accountability, and provides accurate reporting from a common,multiple-source-based travel expense reimbursement system.
2. Meal Expense Reimbursement
When an employee is engaged in a company business function, such as a meeting, travel, or working extended hours beyond regular business hours, they are eligible for reimbursement of food costs.
Written policies provide specific guidelines so that employees know how to use the reimbursement correctly and comply with the policy. Written policies also enable the company to efficiently integrate the meal expense reimbursement with payroll systems and expense management systems.
3. Mobile Phone and Internet Expense Reimbursement
Mobile or Internet Expense Reimbursement provides a level of financial support for Employees working from home or using personal devices to communicate for company purposes.
This support enhances Employee productivity and helps to ensure that Employees are not personally paying for company-related communications.
4. Relocation Expense Reimbursement
Relocation expense reimbursement is available to employees transferring to a new location to perform duties for the company. Relocation expense reimbursement provides reimbursement for an Employee’s packing and moving expenses (to include travel and temporary lodging).
Automated travel and expense reimbursement systems significantly improve the efficiency of processing complex relocation expense claims and ensure timely reimbursement.
5. Medical and Health Reimbursement
Medical reimbursement covers healthcare costs associated with consultations, medications, and diagnostic tests that are not paid for by health insurance plans.
This benefit shows that the employer cares for their employees and helps to promote workplace wellness through a systematic reimbursement process.
6. Education and Training Reimbursement
Education reimbursement can be utilized to reimburse employees’ costs when obtaining certifications, attending workshops, or taking continuing professional education courses that relate to their work and job responsibilities.
Education reimbursement encourages employees to develop their skill sets and ensures that the company is investing in their continued education to support the company’s objectives for growth.
7. Fuel and Conveyance Reimbursement
Fuel and conveyance reimbursement is offered to compensate employees for the cost associated with their daily commute to and from work or for the cost associated with their local travel that is incurred while conducting business on behalf of the company.
Automated tools provide accurate tracking and have dramatically decreased the number of manual claims that are submitted with errors.
8. Work-From-Home Reimbursement
Work-from-home reimbursement can be used to reimburse employees for the cost associated with the use of:
- Electricity
- Internet service upgrades
- Ergonomic furniture
- Office supplies
This reimbursement promotes productivity while working remotely and demonstrates an employer’s flexibility with the modern workplace.
9. Reimbursement for Communication and Telephone Expense
Reimbursement for telephone expenses includes any cost incurred from the use of a personal phone for any official telephone call made to a customer or internal communication.
Integrated reimbursement software provides an easy way to file and get your claim approved.
10. Miscellaneous Expense Reimbursement
Miscellaneous expense reimbursement includes costs associated with incidental items used in conducting business, such as printing, office supplies, and emergency business needs.
A flexible reimbursement policy will help businesses operate smoothly with little or no delay from an administrative perspective.
Why Employee Reimbursement Is Important for Every Company?
1. Increased Employee Satisfaction
Giving timely reimbursement encourages trust and relief from financial struggles; thus, employees tend to be much happier, which helps to raise morale in the workplace as well.
2. Improved Policy Clarity
Having clear reimbursement policies will help keep things transparent, limit disputes, and give employees a better understanding of their eligible expenses.
3. Better Compliance and Audit Support
Tracking reimbursement properly ensures that all laws and regulations are being complied with, thus making the audit process much easier for internal and external auditors.
4. Increased Productivity
Prompt reimbursement for official business expenses, without having employees continually following up on expenses, increases employees’ ability to focus fully on their jobs.
5. Improved Company Brand
Having fair reimbursement practices demonstrates that your company is supportive of its employees, which positions your company well in a competitive employment environment.
6. Accurate Financial Reporting
Providing Reimbursement Software gives the finance department accurate tools to track, report, and budget expenses.
How to Choose the Employee Reimbursement Software for Your Organization?
1. Assess Organizational Needs
Evaluate internal requirements, determine your volume of reimbursement, categories of expenses, and type of workforce prior to selecting reimbursement software that meets their needs.
2. Ensure Payroll Integration
Integrate with Payroll, be sure that the reimbursement software works well with the payroll software, so that reimbursement is made timely and accurately.
3. Look For Automations Features
Validate automation features: automating the process of reimbursement reduces errors, increases the speed of approvals, and enhances the employee’s experience as a whole.
4. Mobile Accessibility
Provide mobile access, and employees should have access to reimbursement software to submit claims anytime, through a mobile-friendly app.
5. Compliance & Policy Controls
Maintain compliance with policy and tax laws. The reimbursement software must allow for compliance with tax laws, limits set forth in company policies, and the hierarchy for approvals.
6. HRMS Integration
Complete Integration with HRMS, it is important for this reimbursement software to integrate with attendance management systems, leave management systems, and performance management systems.
7. Reporting & Analytics
Develop reporting & analytics with an advanced report feature, and the HR and finance teams will have access to analyze trends in reimbursement and monitor cost control.
Why Savvy HRMS Is the Best Choice for Your Organization?
Savvy HRMS’s standout features are its all-in-one employee reimbursement service and its ease of use for modern organizations. Automated process flow of the expense claims, approvals, and payments provides all the necessary tools for both compliance and transparency.
Why do companies use Savvy HRMS for Employee Reimbursement?
- Easy management of employee reimbursements.
- Integration of reimbursement software with payroll software.
- Included time and attendance tracking.
- Smart ways to manage employee leave.
- Advanced performance appraisal methods.
- Easy access to employee self-service portals.
- Reports and analytics available in real-time.
With Savvy HRMS, you will have simplified operations to meet HR requirements while having an enhanced employee experience.
Conclusion
The process of reimbursing employees is an important component of HR, as it affects employee trust, their satisfaction, and the efficiency of the organization. Structured reimbursement policies and advanced reimbursement software (like Savvy HRMS) help companies to simplify their processes, compliance, and increase productivity for employees.
Schedule a free demo with Savvy HRMS to see how smart HR technology can change the way your business does employee reimbursements and your overall HR process.
