Every business needs to spend money to maintain operations. This underscores the importance of managing cash flow in running an organization, whether you’re only starting out or already keeping an established company afloat.
Sometimes employees may incur business-related expenses for travel like hotel accommodations or even urgent, out-of-schedule purchases. In these cases, a business needs to arrange a reimbursement system.
Such a system might seem complicated, especially as the company grows. However, it is necessary to keep business expenses in order.
Why It Matters
Processing reimbursements and expense claims can be complicated at times. Various factors come into play, such as workload and company size. So here are several reasons to streamline your company’s finance processes.
Saves Time and Resources
The more employees you have, the more reimbursements can be challenging to deal with. Depending on your process, you might have to deal with tons of paperwork each month.
On average, 26 percent of an employee’s workday gets wasted on unnecessary or redundant tasks. This is understandable as the more time you spend on reimbursing business-related expenses, the less time you will have for other essential tasks.
Streamlining your process means getting rid of any redundancies or unnecessary steps. This will help save your business time and resources. You and your employees can prioritize other pressing matters without getting too caught up in the minutiae.
Avoids Unnecessary Stress
Having employees spend their own money for business purposes can be stressful. It becomes more of a burden if they go through an inefficient claims process to get their money back.
What may seem like minimal expenses to you might cause problems for your employees. Forty-five percent of employees report experiencing personal cash flow issues due to business expenses.
Inefficient expense claim processes can harm both your employees’ personal and professional lives. The stress they experience outside of the workplace can affect their work performance.
Maintains Good Employee Relationships
Seamless expense claims and reimbursement processes help improve employee relationships. Less employee stress means improved feelings toward work.
Finances can be highly personal, which can affect employees’ well-being. A more efficient reimbursement process can minimize stress and resentment surrounding money. Employees need to know that their company is there for support. This trust will improve the employee-employer relationships within your company.
How to Streamline Employee Expense Reimbursement
After grasping the necessity of streamlining, it’s time to implement it. Here are several adjustments you can make to your company’s process. Applying just some or all these factors could provide significant improvements.
Set up Transparent Policies
The key to a streamlined process is well-defined policies. Clear and well-written processes are a lot easier to follow and implement. Efficient operations also save you time and money.
If you’re still in the drafting stage, make sure to review your policies or even get some outside opinion. Getting it right initially will save you a lot of resources in the long run.
If you already have an existing policy, don’t be afraid to review it and make the necessary changes. It can take some time to go over it, but the results will benefit the company for years to come.
Ensure Employee Involvement
When crafting policies or making necessary changes, make sure to involve your employees. Accounting might seem like an isolated process, but it involves everyone in practice.
Inefficient reimbursement policies can affect employees’ personal finances. It can also affect their comfort during business trips or company purchases.
Ask for their feedback regarding company processes. You can do this through feedback forms, department meetings, or other relevant methods. Take their feedback seriously and consider their concerns when making your policies.
Issue Corporate Cards
One way to streamline the reimbursement process is by issuing corporate cards through providers like Spenmo. These can be debit or credit cards, depending on your company’s needs and resources.
The use of corporate cards dramatically reduces the effort needed to process reimbursements. When used with a tracking app, there would be no need to wait until the end of the month to process every transaction. You can get notifications of each transaction in real-time.
Employees would end up feeling less cash-strapped as well. They would automatically be spending the company’s money and not their own.
Make Direct Deposits
Some companies issue reimbursements as checks that employees would have to deposit themselves. Although this can be effective, it also involves a lot of extra steps.
You can improve the process by making direct deposits to your employees’ accounts. This method involves less paperwork and effort from everyone involved. Employees wouldn’t need to fall in line at the bank, and management won’t have to sign dozens of checks.
Changing and streamlining existing processes would take some time and effort. It can be challenging, especially if they have existed for a long time, and people have grown used to them.
However, streamlining your processes will only benefit your business in the long run. It eliminates unnecessary efforts and saves you time and energy. It’s a change worth making, and you can start today.