Employees usually get paid for the expenses that occur to them because of business responsibilities, like traveling expenses that occur for business -related traveling, for education, healthcare, and other expenses. Expense Reimbursement is one of those financial processes that every company must handle but always seems like boring and tiring work. Employees also hate filling out forms, verifying details, when they just got back from business trips on behalf of the organization. Reimbursement system is something, a company should check or have a look at regularly as it may increase the liability of the company and it may also lead to increased expenses. Majorly, there are three types of reimbursements:
- Travel and Mileage Reimbursements – these include /anticipate expenses like cabs and meals, air tickets and accommodation, and book them beforehand for business trips. Mileage reimbursements are done when an employee travels through a personal vehicle; in such cases, reimbursements are done for gas, petrol or diesel.
- Business Expense Reimbursements – these occur, in case an employee pays for office supplies, a meal with a partner, or for any training program for his/her skill up gradation that will help him/her in doing the job well.
- Healthcare Reimbursements – these include employee benefit plans such as a health reimbursement account (HRA) and Flexible Spending Account (FSA) for employees to spend on treatment, health premiums or other qualified medical expenses. Basically, these reimbursements are for employee well-being.
Importance of Reimbursement management
There’s a Need for proper Reimbursement Management, if an organization wants to retain its good performers or employees. Automated expense management helps employees in an effortless way for receipt management, expense reporting, and expense tracking. There are also several advantage of Reimbursement Management:
• Reimburse employees faster.
• Paperless expense management process.
• Get better deals for employees.
• Making payroll more efficient.