If your business chooses to reimburse employees over adopting corporate cards, this guide is for you. Part two of a series (see part one here: How to manage reimbursable expenses in your business?) This guide offers actionable advice to help you keep your records accurate, support employee policy compliance, and control business spending.
When employees use personal funds to pay for business-related travel expenses or other work expenses like tool subscriptions, they rightly expect you to reimburse them promptly. But efficient reimbursement isn’t only about moving fast.
As a finance professional, you know tracking reimbursable expenses is vital. Without this correct information, you can’t forecast budgets or manage business expenses effectively. You need to know how much you’re reimbursing your employees to keep accurate and transparent financial records, minimise the risk of business expense fraud, and ensure you don’t miss out on VAT reclaims.
Another reason you should track your reimbursable expenses is to support expense policy compliance. You need clear rules and guidelines to implement employee expense policies effectively, eliminate grey areas, and avoid fraud and overspending.
The best way to track and record your reimbursable expenses is to use effective, award-winning software like Payhawk. Using expense management software automates all the manual administration that otherwise drains your time and stops you from focusing on important things like planning, budgeting, and strategy.
So, how can you use software to track and record your employee expense reimbursements?
First, you must define what your organisation classifies as an allowable reimbursable expense, i.e., hotel costs but not hotel room upgrades or laundry service. Or you might allow company car repairs but not rental care upgrades when travelling for business.
You need to sit down with your management team, detail every aspect you want to reimburse, and then create your policy within the expense management software of your choice.
Additional tip: Provide examples of non-reimbursable expenses throughout your policy to help employees understand why they aren’t reimbursable.
The employee experience should be smooth to ensure they can submit expenses quickly and easily. The easiest way to do it is by enabling your employees to snap receipts and automate data collection using OCR technology, featuring improved AI camera technology, making the entire expense submission process seamless.
After you’ve outlined what is and isn’t a reimbursable expense on paper, it’s time to implement and communicate the strategy. You can do this by using a unified expense reporting system with custom approval workflows. At Payhawk, our user-friendly system helps guide your finance teams and employees through the entire employee reimbursement process from when the expense occurs to when they receive back the funds.
Using a system like ours ensures your process is as streamlined and efficient as possible, removing unnecessary administrative tasks for both employees and admin staff.
After the employee submits their expense and their manager (or whoever you’ve designed as an approver) approves it, the expense is marked in the expense reporting system as ‘approved’. This notifies the finance department that there’s an expense to reimburse.
Employees can then add their bank details and receive the reimbursement as soon as the workflow is completed, enabling the finance team to reimburse employees quickly (individually or in bulk).
Automating these steps helps ensure the process is efficient and without unnecessary delays. Plus, this automation means you can reimburse employees faster while keeping control and visibility across the entire process.
No, you don’t have to pay taxes on expense reimbursements. As long as HMRC is satisfied that the expense meets their employee business expense criteria, your organisation does not need to deduct or pay tax or National Insurance on the business expense.
Our fast, efficient reimbursements are an excellent way to keep employees happy while staying in control of spend. But corporate cards (or a mix of both means of spending) can help take how your business manages spending to the next level.
Introducing corporate cards
Using corporate cards means you don’t have to reimburse your employees for spending their money. Instead, they have direct access to company funds when buying necessary things to help them do their job better or while representing your company on a business trip.
Handing over direct access to company funds might sound daunting. But don’t worry; you still have complete control over how they spend company money. You can set individual or team spending limits and even limit the type of expense they can spend it on, i.e., their corporate card could work online to pay for things online.
Just like with reimbursements, our solution automatically chases receipts, pulls out information, and, thanks to customisable fields, helps bucket any spend into the right place before seamlessly transferring it to your ERP or accounting software.
Employees simply need to take a photo of their receipt, select a category, and that's it. Payhawk even automates the data upload process through our OCR technology, eliminating the need for manual receipt data entry.
Interested to see what a future with corporate cards (or a mix of spend solutions) looks like? Book a demo today.
Whether you have tens, hundreds, or thousands of employees, we’re making your business spend work for you, giving you control over spending at scale with a single solution. Say goodbye to tedious finance tasks, schedule a demo with us today.