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What's the ideal turnaround time for expense report reimbursement?

by AppZen January 2, 2021

Philosophies on the timing of employee expense report reimbursements diverge.

On the one hand, companies should work to pay employees back ASAP; good folks are laying out their own money for work expenses and essentially giving employers hundreds of millions of dollars in interest-free loans, every day.

On the other hand, we know that, unfortunately, expense report misconduct is a major source of occupational fraud, which cost companies around $3.6 billion in 2020 alone. In other words, companies need a bit of time to make sure they’re paying the right people the right amount of money.

While there is no precise law on deadlines around expense report reimbursement, there is a powerful consensus among T&E professionals that making employees wait more than 30 days after submission is not appropriate.

While there are many reasons for this sentiment, the best is that most credit cards have a 30-day billing cycle and employees laying out funds for employers should not have to carry the debt across more than one bill. Additionally, companies should never look at this float of employee expenses as a way to make extra money.

There is almost universal agreement that companies should define their reimbursement policies extremely clearly. For example, explicitly share that expense reports must be submitted at least a week before the next payroll date, in order for the amount to be included in that next check.

Or, if the company prefers to only pay expenses at the end of every month, make a similar deadline 5-7 days before the month’s last day and always pay employees with the next check when they meet it.

At AppZen, we believe you should reimburse your employees for their expenses as fast as possible. That’s why our artificial intelligence platform was built to audit expenses in real time.

Expense platforms like SAP Concur, Coupa, and Chrome River have been around for years, helping back offices with timely employee reimbursements, approving reports and adding the funds to paychecks.

With AppZen, companies can have audits in place, as well, in seconds and right in the workflow — ensuring that 100% of all expenses are scanned for misconduct.

In short, there’s no reason to make your employees wait even 5 days for expense report reimbursement. Get started today.