There is more to this operation than its name anticipates. Travel industry workers need to know all about it because it is a staple of their business.
Lunch meetings with a client. Hotel bookings to attend a congress. Long-distance trips to work at a client’s facility. Snacks and drinks for a meeting’s coffee break… What do those operations have in common? They are examples of business expenses eligible for reimbursement. On our latest post, we are going to show everything you need to know about business reimbursement!
Frequently asked questions
Reimbursement is the practice of refunding employees for business expenses. Employees spent the money on goods and/or services directly related to their job activities, so they should not carry that financial burden. In general, companies ask them to make the purchase because it quickly addresses the problem; then, they make sure to reimburse them as soon as possible.
We have researched a few specific topics with which people have doubts. This way, instead of writing in an arbitrary sequence, we went directly to everything you want to know. Check it out!
This practice is a specific case in which employees are compensated for all expenses they had while traveling for work. Those expenses typically comprise transportation, lodging and meals, but there may be others depending on the circumstances – some employers offer leisure tours to reward high performances, for example.
Airplane and/or bus fare, hotel accommodation, car rentals, meals, and specific expenses for work purposes such as venue bookings, and tickets to attend conferences. Each company has its own policy, of course, but a rule of thumb is that expenses directly related to work activities are fully reimbursed; for those related to the employee’s well-being, policies tend to vary.
Typically, employees need to submit a series of documents to the company. Receipts and any form of authorization for the expenses are mandatory, but some companies may ask for more documents. That submission may happen traditionally, with paper forms, or by digital expense management systems on the company’s internal network.
Expenses directly related to work, such as event bookings and equipment rentals, are limited by what was originally agreed – the company selects what to purchase and approves the exact funds to pay for it. When it comes to the employee’s well-being, which includes hotels, meals, and transportation, companies often set daily limits of how much they are willing to reimburse.
In general, it takes a few weeks for travel expenses to be entirely reimbursed by the employer. That timeframe may become shorter if the employee submits all necessary documents with plenty of time, and longer if the necessary approvers take too long to move the request forward. The rise of digital reimbursement systems has made the whole process much easier.
Companies tend to issue corporate credit cards for business expenses, whether during trips or not, because it makes expense management easier. By concentrating all business expenses on those cards, they can virtually end out-of-pocket expenditures and, as a consequence, end the need for reimbursing employees as well.
When an employee uses a corporate credit card, they never pay out of pocket; their corporate expenses are directly billed to the company. This way, there is actually no need for them to be reimbursed. In such cases, employees only need to agree on the expenses beforehand and/or report them afterwards for approval and record-keeping purposes.
The best recommendation is to contact the company’s finance department for guidance. Some companies allow employees to send alternative documents to verify their expenses, especially when the amounts are relatively low.
If your company still does not use corporate credit cards, the best strategy is to stay organized. You should register each receipt whenever it is generated, because it is much easier to lose or forget about it later. That can be done with your phone: you can submit it to dedicated apps for expense management or simply take a photo of the receipt to submit later.
Of course! There are automated systems which make the whole process much easier. They can be paired with mobile apps, for example, so the employee can take a photo of their receipt and submit it to the company. It is also possible to keep track of their reimbursement requests and get reference numbers in case they ever need to contact support.
Then again, many companies are issuing corporate credit cards nowadays. This strategy simply eliminates the need for employees to pay for corporate expenses out of pocket and, as a result, eliminates the reimbursement process altogether.
The very first step is to notify the employee about it, whether through email or a notification on the company’s dedicated app. Then, the employee may appeal the decision and, if applicable, submit additional documentation.
Yes. International expenses often add complexities such as currency conversion and variable tax rates. The best advice is for you to check the company’s policies before making expenses during an international business trip.
Conclusion
The process of reimbursing corporate expenses has become commonplace. One can say that it has been entirely mapped and understood, so the problems that still exist come from its very operation: delayed reimbursements, lost receipts, and misunderstood policies, to bring a few. That is why companies are issuing credit cards to try and discontinue this process altogether.
What is the reimbursement policy of your company? Has it switched to corporate credit cards yet? Feel free to contact us in case you have further doubts about corporate reimbursement!
