How to Best Manage Staff Reimbursement?
The most common method is for employees to provide their own receipts, and the accounting department then reimburses this as one lump sum into employee bank accounts, either at regular intervals, or alongside the regular salary payments. Yet despite being the most common means, it is also the most cumbersome.
There are other options available to businesses or virtually any size, including:
· Corporate credit cards: Providing employees with a company credit card means they are not forced to dip into their own funds for work expenses, and the business receives one itemised statement each month, making verification much simpler than sorting through a pile of individual receipts.
· Pre-paid allowances: In some cases, it can work out to be simpler and more efficient to pre-pay employees an allowance as part of their salary package (such as a car allowance for workers who regularly drive between sites, or an entertainment allowance for salespeople who regularly entertain clients and prospects). This allowance covers the expected costs and is not a taxable portion of the employee’s income, making it much faster and easier to administer than retrospective expense analysis.
· Company vehicles: Having company-owned vehicles can reduce the burden of travel expenses, since all costs are directly borne by the business. Employers can further streamline the process by using a fuel card to manage all fuel purchases. Alternatively, some businesses will seek to hire cars as needed, particularly when travel isn’t frequent enough to justify the business owning its own vehicles.
· Digital processing platforms: There are digital platforms that allow employees to upload expenses on the go simply by taking a photo of the receipt. The platform then automatically processes expenses, tax and employee refunds, saving both the employee and the accounting team considerable time and effort.
Let’s make a concerted effort to reduce your bookkeeping costs by streamlining some of your activities. Ask your Kensington advisor about streamlining processes next time you are in.