Payroll and taxes are generally thought to be the main elements when it comes to company accounting. However, there are extra expenses that need to be taken into consideration. Employees often use their personal account for business-related tasks like travels, work dinners, etc. These expenses are reimbursed once the employee submits invoices. Even though it looks like a simple task, it is much more complicated than it seems.
In addition to reimbursable expenses, bonus payments are also a part of accounting processes… At the end of the day, the total expenditure of the company for employees includes payroll, taxes, reimbursable expenses, bonuses, and also possible advances. HR professionals are supposed to regulate and manage employee expenses and it can get chaotic in conventional ways. Having an efficient structure and system makes expense management much easier for everyone. In this article, we will be talking about managing expenses and bonuses efficiently.
Reimbursable expenses include everything that the employee spends from their own account on behalf of the company while conducting their job. For example, if an employee is to attend a meeting out of the office, the company is supposed to return the expenses regarding the transportation they use, the meals they have, and anything reasonable that occurs during that time.
Usually, the employees are responsible for reporting their expenses to the company, specifying dates and items, and adding invoices. Sometimes the invoices pile up, and the submitting process becomes difficult when there are no guidelines on how and when to do it. For HR professionals, it can also be complicated to decide what an expense is, how to categorize them, etc. Managing expenses properly also contributes to accounting processes in the future, which is in communication with HR departments.
Giving bonuses is a nice way to reward employees for their efforts. Companies may choose to give bonuses to their employees when they achieve a target or to motivate them. Bonus payments can be described in employee contracts, given under certain circumstances at the end of the year, or the company may give discrete bonuses at special times such as national holidays. Bonuses are also included in company budget calculations, so it is important to record them properly to avoid miscalculations and problems with tax authorities.
Employees may not know what exactly reimbursable expenses are and financial subjects may create confusion and be stressful for them. It is best to specify and exemplify possible expenses rather than trying to tag them once the invoices accumulate. Creating expense categories like “travel”, “food”, “entertainment”, etc. would simplify employees’ work to report expenses, and also enable HR professionals to easily report them to accounting departments. It is also important to have a specific budget for different types of expenses to avoid excess spending and keep employees within specified expense boundaries.
With lots of items and categories, employee expenses are hard to keep track of and record properly. It is not rare to see our expense invoices piling up before we submit them or getting lost in a messy desk. Employees must be encouraged to submit their invoices before it is too late; expense submission must not be confusing and become a big job to complete. You should have a structure that covers authorization, submission, approval, and reimbursement of expenses and avoid missing any data that would create problems in the future, such as unnecessarily increasing your workload and getting you into trouble with legal authorities.
Typically, companies provide employees end-of-the-year bonuses when yearly company goals are achieved. Here, the bonus is something expected by the employees, not only a gesture. Providing the specifics of company goals and the circumstances in which these regular bonuses are given is essential to avoid confusion.
Discrete bonuses given on special days are generally surprising for all employees and this gesture makes employees feel valued, leading to an increase in motivation. The company may also offer performance-based bonuses to specific employees for their outstanding performance. This type of bonus creates a sense of accomplishment for employees and encourages them to perform better. Here, the important point is to determine criteria and be transparent about it to make employees feel that bonuses are provided fairly and everyone meeting the criteria can get a bonus.
During expense management, multiple parties like employers, employees, HR professionals, and accountants need to communicate continuously. Effective communication is an essential part of expense management. For example, a manager or HR professional can approve an expense reimbursement request but there might be obstacles in accounting processes; so, it is best to be in communication all along the line. This communication problem can be solved by a dynamic expense management system that everyone can reach.
Typical manual expense reimbursement processes require employees to file an expense report using paper and a pen or a spreadsheet. When managers approve reimbursement, data regarding the expenses is submitted and accounting departments take necessary actions. This is a lot of work, and no one needs manual errands in today’s dynamic business life. Choosing a suitable expense management software would save lots of time, effort, and money for companies.
Expense management software make authorization, submission, and approval processes much simpler. With a shared dashboard, managers can track expense requests and approve them quickly. Employees can submit their invoices instantly in categories HR professionals specified, at any time and from any device. Using software also automizes communication; each involved party can access the system via their devices and take necessary actions easily. Since the software is structured, you do not need to think about preventable mistakes and easily comply with legal requirements.
If your company still does not have expense management software, the Kolay core app offers you an efficient way to manage all the expenses and bonuses in one place and create expense reports instantly on your computer or using the Kolay mobile app on your phone. To see how efficient expense management can get, try Kolay now for free.
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