When it comes to business expenses, companies nudge workers to manage certain levels of responsibilities. As employees take responsibility in their own hands, they spend money on certain purchases on behalf of the organisation. Reimbursing these expenses can be a hassle for employers and managers. This blog will elucidate how claims reimbursement software helps sort out the confusion and misconceptions surrounding the process.
Claims Reimbursement – Overview
Claims reimbursement is cash paid to employees as compensation for expenses incurred during a business-related activity. For instance, a sales executive meeting with clients can be reimbursed for travel expenses, meals, and more throughout the day. As per the company’s claims policy, the expenses will be reimbursed entirely or partially.
Every individual needs to understand that reimbursement is way too different from compensation. In both cases, employees will get paid, but the concept is entirely different. Compensation is dispersed as salary and bonus. Employers are entitled to compensate using cash for the work executed by the employees during their tenure.
Difference between compensation and reimbursement
Understand the difference between the two concepts with a detailed example
DigiSME’s Business Development Manager is on a business trip in Delhi. The company has already paid for the flight tickets and his stay in the city. However, he had to pay for brunch during the client visit. The BDE can gather the expense receipts throughout the business trip, which can be later filed for reimbursements. After verifying the receipts, the finance team will approve the expense reimbursement.
On the other hand, compensation like salary is dispersed at the end of the month, and bonuses are dispersed in some companies annually.
If there is no proper system in place, employers and employees will experience the pressure of executing the claims process. It is not just the responsibility of management; employees should also complete certain tasks related to reimbursement.
From furnishing expense details to getting the manager’s signature and verifying with finance for repayment, a lot of tasks must be accomplished. Moreover, the claims will only be approved if the attached receipts are original. This clearly emphasises the importance of having reliable claims management software.
Before discussing the claims software, let’s get to know about the importance of reimbursement.
Why is it important to reimburse claims quickly?
Some job roles like sales representatives, marketing teams, and management teams will be working from the office one day. The next day, they will be embarking on a journey to expand the business growth by meeting potential prospects or existing clients and traverse to promote the products or services across the countries.
Some business expenses are unpredictable but necessary. Employees should be willing to take a step by splurging when required. However, reimbursement plays a crucial role in workers’ decisions. If an organisation does not show interest in reimbursing the expenses promptly, the employees will have doubts about spending for the company next time.
A surefire process to streamline claims reimbursement
The ideal way to streamline the claims process is by investing in leading-edge software like DigiSME. With expense reimbursement software, most manual tasks can be automated, and lots of time spent on redundant activities can be saved. It allows the HR or finance departments to indulge in other important activities. Here’s a quick review of how expense reimbursement software can be used efficiently.
Address the claims reimbursement policy
Initially, the management should address allowable reimbursable claims. For instance, basic accommodation is reimbursable, but luxurious room upgrades should be avoided. When the policies are precise, HR or finance teams can update them in the claims software to start using without any hassles. Ensure that employees are aware of the unclaimable expenses to avoid any confusion in the future.
Use advanced technology for scanning receipts.
Receipts are the most critical documents in a claim reimbursement process. It is the management’s responsibility to invest in software incorporating Optical Character Reader (OCR) technology. OCR converts images of text into machine-encoded text. This technology elevates the employee experience and makes the submission process entirely easily.
Report analytics for precise reimbursement details
Every organisation has realised the importance of data accumulation. Reports are the most organized way to collect data. When it comes to claims reimbursement, management can have a clear picture of employees’ expenses for the company. A month or a year’s claims data enables the organisation to turn gathered data into insightful information for making decisions.
For instance, management analysing a month’s claims expense in accommodation or transportation can allot reimbursement funds for every month. This allows the employees to receive reimbursements without any delays.
Wrapping Up
Organisations searching for the best claims reimbursement software can try DigiSME. With extraordinary features, DigiSME reduces the work of employees and management teams in handling claims.
