Steps to Manage Expense Reimbursement Efficiently

Employee with receipts, credit cards, Pipefy card and money, on a flow to symbolize the expense reimbursement flow.

Does the sound of “expense reimbursement” make your skin crawl and your mind go back to piles and piles of uncategorized paper receipts? You’re not alone, though.

More people than you can possibly imagine have faced the nightmare that is dealing with reimbursements. Things don’t have to be that way, though.

Implementing a few changes and establishing a few rules, expense reimbursements can go from being your worst nightmare to just another task. Before I explain how that’s possible, let’s take it down a notch and go back to the basic concepts of the reimbursement process.

What is Expense Reimbursement?

According to the expense reimbursement definition on The Balance:

Expense reimbursement is a method for paying employees back when they spend their own money on business-related expenses. These expenses generally occur when an employee is traveling for business but can occur in other work-related situations.

Long story short, expense reimbursement is the process through which your company pays back what you spent (out of your own pocket) on business-related expenses.

Defining business-related expenses is tricky, though. Each company has its own criteria to define what is (and what isn’t) related to work.

Most travel-related expenses (such as flights, transportation, lodging, meals, etc.), for example, are considered business-related and eligible for reimbursement.

Other expenses such as purchasing work-related material, taking prospective customers (or employees) to lunch/dinner, educational material/courses can be considered refundable depending on each company’s policies.

Speaking of expense reimbursement policies, most companies have a defined set of policies in which they define what can be reimbursed, the situations in which expense reimbursements are allowed, etc.

Steps to Manage the Expense Reimbursement Process Efficiently

Most companies try to establish an internal system according to which employees must report their expenses and request for their reimbursement. Let’s go back to the travel expenses example.

John traveled from San Francisco to New York to meet a customer. Once he got there, he spent on cab/uber fares, meals, lodging, etc.

In order to report these expenses and ask for reimbursement, he must fill a paper with detailed information about each and every expense, attaching all original receipts. That generates a pile of paper he’ll then pass on to the HR/finance department so they can evaluate and process his request.

It sounds boring and archaic, doesn’t it? If only there was an easy way to deal with expense reimbursements that eliminated all that…well, there is!

1. Define the Policy 

The first step to have an efficient process is to create clear rules of what’s eligible to be reimbursed and what’s not. Having a stablished policy will give your team full autonomy to approve or deny a request. 

And, of course, it’s important to teach employees what’s acceptable. Creating a pattern will decrease the number of exceptions and give the financial team the ability to treat demands faster.

2. Standardize the Requests

The beginning of every process is the input of information—as we already explained here. And if the input doesn’t arrive with all the necessary information, the process already starts inefficient, causing rework and costing time. 

3. Centralize all Requests 

With all the information in hand, it’s necessary to organize it. Imagine your financial team receives 10 requests a day. In a week you already received 50. How to deal with all documents, different deadlines and employees’ information?

You’ll need a place to centralize it and have full visibility of each request.

4. Automate Repetitive Tasks

When the process is mapped and standard, some activities become manual and repetitive, such as designating a demand for a person or notifying the manager when an urgent request arrives.

Using a robot to automate manual steps saves valuable time to invest in activities that need a human to be done. Take a look at how the Automation feature can help you.

5. Easily Communicate with Stakeholders

When the financial team receives a request, in paper or by email, the employee will want an answer to see if it’s correct, to know when the payment will occur, to ask anything about due dates… 

This is not a dream for those who hate long email threads. That’s why this communication has to be efficient and it’s another task that can be automated with Pipefy. If you want to learn more about the Email Template feature, take a look at here. 

6. Measure and Control all Expenses

And the last step to have an efficient reimbursement process is to measure the process efficiency. Knowing how the team is performing is a key point to continuously improve your process. 

Not only that, but measuring also allows the financial team to have full control of where your company is spending money.

How to Implement an Expense Reimbursement Process

Now you already understood how to make your reimbursement process efficient, it’s time to apply and implement it.

Pipefy has a ready-to-use Expense Reimbursement template. Start controlling all your company’s expenses. 

Written by
Isabelle Wuilleumier Salemme
Head of Customer Support @Pipefy. She uses her extensive Pipefy knowledge to help users make the best of Pipefy via support and writing informative content pieces. Besides being in charge of support, she's an avid reader, a coffee lover, and a professional photographer.