Companies need to act and respond to things quickly. Anything slowing them down is just a drag on the operation that impacts your bottom line. Employees often need to pay for things in the course of doing their job and need to be compensated. When money and business collide, companies need a standardized plan.
Effective reimbursement policies enable companies to obtain the things and services they need without stressing or burdening employees. If one employee makes one purchase and has to figure out how to get paid back, it may not seem like a huge deal. However, the problem gets worse each time and prevents companies from scaling up and growing.
Employees resent having to pay out of pocket for work-related expenses. There could be uncertainty about timelines or delays in repayment, and expecting them to take this on isn’t fair to them. It also doesn’t set up a good foundation for running a company.
Let’s check out a few core principles of setting up effective employee reimbursement policies.
1. Create Corporate Culture
You may not immediately associate an employment reimbursement policy with corporate culture, but they’re very much related! Employees feel empowered to act on the company’s behalf when they have clarity and confidence about how repayment works.
If something needs to be purchased, you don’t want them to feel timid or reluctant in that moment. Reducing confusion and giving employees confidence that they’ll get repaid in a timely fashion speaks to the company’s core values, and that’s what company culture is all about.
2. Instilling Trust
Verbal agreements about money are nice, but they seldom instill the level of trust that comes after consistently enjoying smooth and timely repayments. When employees get repaid without facing any hiccups, they’ll have a type of faith and trust in the company that is hard to get any other way.
“Put your money where your mouth is” speaks to how proven action means more than talk. Paying your employees in the manner and timeline you both agreed to is the ultimate way to put your money where your mouth is.
Trust motivates employees to deliver better customer service.
3. Outsource Debt Collection
Sometimes the company has an effective reimbursement policy, but still, problems arise. Perhaps there was a genuine misunderstanding, and an employee innocently made unauthorized travel expenses.
Worse, sometimes, an employee deliberately exploits a company reimbursement policy and charges personal expenses to their work. Even small companies can do everything right and still face these challenges from no fault of their own.
Outsourcing debt collection by hiring a collection agency lets you use licensed, trained specialists who have resources your in-house HR personnel won’t have. Since 1996, Summit A•R has a proven track of recouping about double the industry standard in debts.
Hiring Summit Account Resolution to handle it relieves your HR team of a major burden and challenge. Even if they were to tackle it themselves, it would take them longer, and they wouldn’t get the same results.
What if an employee deliberately charges personal expenses to the business and then tries to go off-grid? Our skip tracing solutions tracks down ex-employees who try to run away from the money they owe the business. We can find down people trying not to be found, locate their assets, and turn bad debts into bottom-line revenue.
Very few professional debt collection agencies in the US have an in-house, fully-licensed private investigator handling their skip tracing department. Summit A•R is proud to offer this service at no extra charge. Our agency gets much better results than those that rely on free searches to locate people.
Ideally, employees don’t take things this far, and both sides stick to the reimbursement policy. Business leaders can feel confident that outsourcing debt collection to leading professionals discourages employees from exploiting reimbursement policies, if the thought ever crossed their mind.
They will also enjoy peace of mind knowing that whether employees make an intentional or innocent mistake, money and focus won’t be diverted from the core business. In either case, it’s crucial to treat all parties with dignity and never hostility or aggression when recouping debts. This means all your employees, clients, and customers.
Summit A•R ‘s CEO, Tim Turner, spoke in an interview recently about some common misconceptions about debt collectors that people may have. While using a private investigator to locate debtors or confront employees about uncomfortable topics may seem intense, we do that work for you, so you get the results without that labour or confrontation.
4. Boosting Efficiency
Employee reimbursement policies aren’t just about money moving into or out of accounts. When employees have clear, simple instructions to follow regarding repayment, they can book travel, make purchases, and approve processes more efficiently.
Don’t make up a repayment policy on the fly. Establish one from the start and include it in your onboarding process for new employees and managers. Both sides need to understand how expenses are claimed and paid out.
Getting the process right the first time keeps companies efficient. No matter how quickly you resolve any issues that may arise, by then, the problem has already cost some amount of time and money.
5. Company Buy-In
Even the best employee reimbursement policy won’t help the company unless the managers and business leaders buy in. People at the top need to understand and comply with all its aspects so their teams follow suit.
When managers and employees support the reimbursement plan, they’ll use it. The less work there is to make people follow the rules, the more effortless compliance will be. We help companies reclaim overpaid wages and unauthorized business expenses, but it’s better if clear policies prevent this from arising in the first place.
6. Get Better and More Reliable Accounting
Companies with clear reimbursement policies have more reliable underlying financial data. Enjoy better forecasting, budgeting, and managing of what the company spends.
The time invested upfront in creating this policy pays for itself over the long term in countless intangible ways. For example, employees gain trust in the company and feel connected to its culture. Employee reimbursement policies lead to improved accounting, which is perhaps the only benefit you can fully measure and track.
Companies are wise to lay out the groundwork for vital company policy clearly and right off the bat. Set up your teams for success, so they can focus on the core parts of their job instead of secondary bureaucratic tasks. Then, hire professionals like Summit A•R as a fallback to give you peace of mind and assurance that money won’t leak away.