Good practices: reimbursement management to keep the business healthy

Good practices: reimbursement management to keep the business healthy

Table of Contents

Controlling work expenses is an essential factor in maintaining financial sustainability and healthy business growth. Self-explanatory, work expenses refer to spending occurred in the service of the company, in locations outside its physical facilities.

These expenses can vary, after all, each organization has its own operational demand. From simple copies to airline tickets, having an efficient control of these expenses incurred by employees is indispensable to effect fair and due returns and also, to preserve the financial health of the company against scams.

In order to ensure these good practices, reimbursement management must be structured as a priority in the company. To do this, you will need:

  • determine eligibility in the refund policy;
  • define which expenses are reimbursable and what amounts will be reimbursed;
  • establish the deadlines involved in the reimbursement, define the procedure for requesting reimbursement;
  • determine how the company will handle refunds, create a document with refund policies;
  • analyze and implement improvements in the refund process.

If you want to know the 10 financial management mistakes that can compromise your company's sustainability, we recommend reading this article here.

Now, to better understand the relationship between good practice policy, reimbursement management and financial health, keep following this post. We separate the steps step by step to structure a control of expenses for foolproof work. Good reading!

What is a refund policy?

As we said, the refund policy it refers to the return of expenses due to the employee for activities performed in the service of the company.

In other words, any expense that the employee has when performing any task outside the environment company's physical structure and that it is paid for with its own money must be reimbursed and controlled by the corporate policy of good practices. Refund management is an essential measure to ensure that this return is made in an appropriate manner.

These expenses may include air or road tickets, mileage expenses traveled in vehicles personal, uber or taxi, lodging, meal, printing or copying documents, event registration fee, and so on.

As each company has its own operational reality, these expenses can be different. For this reason, the control policy must rely on efficient inspection processes, good practices that ensure the employee's rights and meet legal requirements.

What is the importance of having a refund management?

Not having proper reimbursement management can pose serious problems for the financial sector, due to fraud and consequent overpayments, and also for the financial sector. Human Resources (RH), due to the missing payment, creating disagreements with the workforce itself.

For this reason, structuring an efficient control over expenses at the service of the company is essential to ensure your financial and organizational health.

Control and efficiencies justify the importance of adopting a policy of good practices. Reimbursement management, after all, brings a number of advantages to the business, such as:

  • greater control over company spending;
  • improvement in the feasibility check of the services provided;
  • improvement in the planning of financial operations (investments, cuts, applications, etc.);
  • definition of plans on realistic budgets;
  • definition of a set of rules that minimize unforeseen and uncertain situations in the reimbursement process;
  • improvement in the use of time and training of financial and HR teams;
  • kill financial transactions in legal compliance;
  • improvement in the relationship with the employee (good practices that ensure a fair and dated payment);
  • improvement in profit control.

In addition, it is worth noting that according to the Legislation Labor, labor expenses do not have a salary nature, but an indemnity. The payment of this amount due can be agreed and formalized between the company and employees. Keeping this clear in good management policies for reimbursement management is essential.

After all, what are the good practices of reimbursement management?

Understanding the company's real operational demands is primary to creating an efficient policy of good practices. Reimbursement management requires a judicious set of rules, which meets the needs and specificities of specific services, analyzes cost centers and regions and verifies the veracity of the information provided.

Some simple practices can ensure this care. Below are some of the best behaviors of a policy of refund.

Define the process

One of the best practices in managing reimbursement is the definition of the operational process. As it is an activity that involves capital and the satisfaction of the main instrument of value for any organization, employees, having defined processes is indispensable.

Therefore, the company must have clear payment rules, whether it will be carried out before or after the activity, how the investment approval flow will be, how the accounts will be rendered, and so on.

Simplify the process

That done, we need to simplify as much as possible. This is because for some employees, whose work assignments are often done outside the physical environment of the company, accountability would take an expressive time in their workday, harming their income.

The simpler the process, the faster the employee is able to carry out the operation. Consequently, less time will be wasted.

Automate the process

Automate the process is also one of the main conducts of a good practice policy. Automated reimbursement management allows auditing, approval and payment to be carried out smoothly, optimizing the process and preserving the organization's resources.

What are the main steps to implement a refund management?

Now that you know the main conduct of a refund policy, here's how to structure it in the company.

1. Determine eligibility in the refund policy

Determining who will be able to claim the cash return is the first step in structuring the reimbursement management in the company.

This definition must be clear in the rules of the good practice policy. Refund management is a measure that must contemplate positions specifics.

2. Define which expenses are reimbursable and what amounts will be reimbursed

As well as the eligibility of positions, the situations and values ​​contemplated must also be distinguished in the rules of the policy of good practices. Reimbursement management is a financial transaction that meets the specifics of an agreement, so having the conditions of this agreement very well understood is essential.

Thus, employees will be aware of what situations may be reimbursed, what amounts are covered by the company and who will be able to request this refund.

As we said, each organization has its own policy. Therefore, as long as it is within the legal requirements, this contemplation can cover different situations.

3. Establish what the repayment terms will be

In order to ensure more significant budgetary control and preserve the satisfaction of the workforce, it is essential to define the deadlines involved in the reimbursement process, avoiding late requests and disagreements.

The application deadlines, the payment term and the number of installments necessary to settle the amount due must be informed. All periods linked must be punctuated in the rules of the good practice policy. Refund management gains transparency with this measure.

For example, accountability must be made immediately after returning to the company, accountability must be made by the 15th of every month, payment will be made by the 5th of the following month, payment will be made after 15 days of approval of accountability, and so on.

4. Define the refund request procedure

The next step is to define the procedures for requesting reimbursement, which must also be explicit in the rules of the good practice policy. Reimbursement management may or may not request invoices and vouchers, may or may not serve operations outside business hours, may or may not be carried out on conventional communication channels, and so on.

All conditions must be presented and the files presented in an understandable manner and without the possibility of double interpretation.

Thus, the company should score the forms of proof of identity, the communication channels used for this situation, the documents necessary to prove the expense, the ways of describing the expenses, the ways of presenting this information, the payment methods style=”font-weight: 400;”>, among others.

5. Determine how the company will handle refunds

In the fifth step, the company must define how it will evaluate requests, what criteria it will adopt, who will be responsible, how the reimbursement will be carried out, how the process will be controlled, what tools are used to carry out a secure management, and so on.

Here it is essential that the financial team set deadlines that do not compromise the payroll, that a separate structure be created so as not to generate inspection problems with the Federal Revenue Service, that the adopted software ensure data privacy, among others.

6. Create a document with refund policies

That done, it is necessary that all these rules are structured in official documents both in the version for employees and in the version of managers.

Rules, rights and procedures must be presented as clearly as possible and presented in a document for the entire organization. It is important that it has easy access, so that consultations can be made with peace of mind.

7. Analyze and implement improvements in the refund process

Finally, analyze the entire process, establish a validity date for the document and revise it whenever necessary. A reimbursement policy must not be static, it must undergo adjustments and ensure practices compatible with the business demands and needs of employees.

Therefore, managers must carefully analyze the document to identify bottlenecks, find points for improvement and shape practices with a view to optimizing them.

Therefore, to ensure that the organization fulfills its commitment to reimburse service expenses in an organized manner, it is essential to structure a policy of good practice.

Reimbursement management is an essential measure to preserve the company's financial health and maintain workforce satisfaction. With the definition of clear rules, the whole process can be done safely and efficiently.

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