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, costing companies around $7 billion in 2017 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 (as, for example, Charles Schwab does with the cash you don’t directly invest within your account).
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, but then, of course, pay folks with the next check when they meet it.
At AppZen we believe you should reimburse your employees for their expenses as fast as humanly possible, or even faster. That’s why we’ve built our artificial platform to audit expenses in real time.
With AppZen, now companies can get the audit piece as well, in seconds, 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.