You know how it goes. It’s the last day of the month and you get the email from finance: Submit your expenses today to be included in the next month’s end-of-month payroll. You break out into a cold sweat, staring at the pile of receipts on your desk and knowing what the next two hours of your life will be like. You also feel somewhat pained knowing that the money you spent for your company will take a month to be reimbursed. Will you end up paying interest on the company charges on your card waiting to be reimbursed?
In an age when you can order something online and have it delivered same-day, a four-plus-week lag on expense reimbursement seems awfully archaic. Not only is it a huge pain, but it’s also very unnecessary. Here’s a couple of reasons why:
1) You shouldn’t need to hang on to your receipts until the end of the month
Not needing to submit expenses until the last day of the month means that it’s easy to procrastinate. However, as with everything else, the longer you wait, the more frustrating the process becomes. One of the many drawbacks of doing expenses at the end of each month is knowing what each receipt was about. Which prospect were you travelling to on that train ticket? Who was with you at that team steak dinner? Where’s the folio from the hotel stay that got shoved under your door just as you were about to check out? And of course, there’s also the panic that comes when you can’t find the receipt for that 500 Pounds customer lunch.
If this kind of thing has ever happened – or if you simply loathe having to fill out spreadsheets (or even cumbersome expense management solutions) – the best solution is to do your expenses as you incur them. For a start, instead of scribbling on the back of the receipt and putting it in envelope to use – or lose – later, just take a photo of it on your phone, and email it straight into your expense claim. If you need to add any notes, such as who ate with you at the steakhouse, just add them to the email. A good expense system can then use its optical character recognition capabilities to automatically extract the rest of the transaction data. Then, pretty much all you’ll need to do in order to file your expenses at the end of your trip is drag the receipt images into an expense claim and hit “submit.” Therefore, you won’t feel that need to keep putting it off.
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2) Expense reimbursement needn’t take so long
Regardless of whether you can promptly submit your expenses, the benefit is moot if the company’s back-end systems are unable to promptly process reimbursements.
One of the biggest challenges with end-of month expense submission is that it creates a bottleneck at every stage: approvers have to wade through all their subordinates’ expense claims and forward their approvals to finance. Finance then needs to process these to ensure any billable expense are sent to AP for client payment, and then reimbursement payments need to be processed either for inclusion in payroll or for a check run (which adds even more time, as they all need to be signed and then mailed out to the employees). Think of hundreds or thousands of these expense claims all coming in at once, and you get the image in mind of the nature documentary where a snake has just swallowed a goat.
Related Reading: The Pitfalls of Manual Expense Reporting
What’s the alternative? Automate much of the expense approval and reimbursement process and you can drastically cut down the time it takes for your employees to get the money back in their bank accounts. Tie this into automated bank (and card) payments, and you can completely eliminate the need for your payroll team to become involved, and take the reimbursement time down from weeks to as little as a couple of days.
So how does this work in practical terms? If your organisation uses expense automation software, your line manager / approver will receive an email notification as soon as you hit the submit button. They can either simply approve by clicking on a link in the email, or if needed, view each line item and corresponding receipt before approving them. Once that’s done, an automated alert will be sent to the next person up the approval chain, if needed. As soon as it’s been fully approved, a notification will be sent to your organisation’s bank, and an expense reimbursement payment is initiated into the employee’s account. Reimbursement happens quicker, the finance team spends less time on manual duties, and employees are much happier. And your bank isn’t going to shut off your card.
If you travel at the beginning of the month, why should you have to wait until the end of the following month to get reimbursed? The answer is – you shouldn’t.
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