Understanding Reimbursement Claims

What is a Reimbursement Claim?

Employees can ask for reimbursements when they pay for business expenses out of their pocket. This can happen a lot during business travels. Companies issue refunds for employees who file for costs. They do so by making a reimbursement claim.

Reimbursements for company expenses are typical in today's business world. Because they can decide whether to repay a cost rather than providing all employees with corporate cards that have direct lines of credit to the company bank account, they allow businesses to have some control over employee spending.

Every business must manage the expense reimbursement process, but it always feels like way too much busy work. Because they don't want to fill out paperwork, especially after returning from a business trip, employees despise it.

Types of Reimbursement Claims

- Mileage and Travel Expenses

Mileage claims are an essential part of the reimbursement process, and they are often overlooked. According to the IRS, employees can claim mileage expenses in one of two ways. The first is a Standard Mileage Rate for business miles driven during the year. The second is Actual Expense method, which requires you to keep a daily log of your miles traveled, your destination and the reason for your trip.

- Reimbursements for Business Expenses

When it comes to business expenses, the reimbursement process can be quite complicated. If you are not careful, it can be easy to make a mistake and cost your company money. It is important that every expense gets a proper code, or else you might end up with a reimbursement claim that will not be reimbursed.

- Health Insurance Payments

The health insurance industry is complex and often difficult to navigate. It is a system with many different parties involved: insurers, hospitals and other healthcare providers, employers, employees and others.Health Insurance Quotes Health insurance is becoming increasingly difficult to find as the number of insurers in the United States has increased over the years. The rise in availability of insurance plans means that people are not able to just walk into a store and purchase health.

Problem with Manual Reimbursement

Manually handling reimbursements is a tough nut to crack for the finance team. Employees might not have enough money to put up cash for company purchases. An employee may have to wait until they are paid to make a car payment or go to the doctor because paying for corporate expenses lowers their credit limit. Employees view their employment as sources of revenue rather than as financial burdens.

Employees and finance teams must perform a great deal of tedious, time-consuming manual work due to expense reports. Hours are spent by employees collecting receipts, filling up expense reports, and entering transaction information. Management must review and approve the request before being forwarded to finance. Before releasing reimbursements, the finance team must process the claims and reconcile the transactions. And that doesn't consider any back-and-forth between the parties before the decisive action.

Challenges with Reimbursement Claims

Reimbursement claims are a process that is often overlooked by business owners and managers. This process can be time-consuming and tedious, but it is necessary to ensure that the company has all of its bases covered.

The first step in the reimbursement process is to keep track of what has been purchased for the company. This includes everything from office supplies to furniture and equipment. A list should be made of each item and the cost for each one, as well as any additional information about it (such as who paid for it). The next step is to take pictures or videos of these items in order to have them on hand if there is ever a question about them (for example, if they need to be replaced).

The third step in this process is recording how much money was spent on each item.The fourth step would be to divide the amount spent by the number of days that were spent in order to calculate the amount spent per day and how long it will take for that money to go back into the bank account.

Best Way to Handle Reimbursement Claims

Automation is an excellent way to control, manage and track reimbursement claims. It leads to happier employees and better expense processes. Maintaining a record of reimbursements also aids in cost management. You may spot where staff are overspending and use that information to inform wise choices that lower costs.