Reimbursing Your Employees: How To Avoid It Completely

Initially, you may express some confusion about this topic. We’re not talking about how to avoid reimbursing your employees from the perspective of just not repaying them at all. Rather, we’re considering how you can prevent the need for reimbursement altogether. 

Believe it or not, the act of repaying your employees can be extremely tedious and problematic. You rely on them having all the records in order, and it can take so long before you’re able to make payments. Not to mention what this does to your cash flow. You think you have x amount of money coming in, and y amount leaving. But, you then have to factor in the reimbursements leaving your company - it’s all a confusing mess. 

What can you do to prevent this from being a problem? In this guide, you’ll discover one very easy and simple solution. Firstly, let’s ask one other question…

Why would you need to reimburse your employees?

Countless scenarios can lead to your employees paying for things out of their own pocket. The best example of this is in a business where your employees are active and spend lots of time away from the office. They drive around delivering services, meaning they have to pay for things like fuel, lunch, or other transportation options. 

Put simply, your business may cover specific things for your employees. So, when they have to pay for them, they will be entitled to a reimbursement. Cue the painful process of dealing with receipts and double-checking that your employees are claiming what they’re entitled to, etc. 

If you can find a way to cut this out completely, it makes your life easier - and it’s way better for employees too. 

The simple way to avoid employee reimbursements

How do you negate the need to reimburse your employees? It’s simple, you stop them from using their own cash to pay for things. Yes, this feels like a straightforward idea, and that’s because it is. The trouble is that many businesses don’t know the right way to go about this. 

What are your options? 

• Provide employees with the business credit card

• Give employees a handful of cash

• Offer them a prepaid card

The first option can work, but only in certain circumstances. For example, if you have a couple of employees, it makes sense to give them access to the business credit card. They can use the card to make any purchases related to the business - such as buying new supplies, paying for fuel, and so on. But, as your employee base grows, you can’t hand out dozens of credit cards. Banks simply won’t do this, so you’re left with a select few using the card and plenty of others without it. Effectively, you’re back in the same situation as you were before. 

What about handing out cash? Well, you have the issue of not knowing how much someone is going to need. What if they run into an issue and need more cash than you gave them? Again, they have to dip into their own pocket to cover extra expenses. Plus, you really depend on your employee to provide receipts and evidence of what they spent the money on. Who knows, they could claim to have bought lunch and fuel, but they’ve really pocketed half the cash for themselves. It’s way too dodgy and confusing to give your employees a sum of cash - there is a far better option. 

That’s right, a prepaid card is the best option to consider here. It takes the downsides of the previous two ideas and completely wipes them out, providing a very convenient way for your employees to use the company account to pay for expenses. 

What are prepaid cards and why use them?

Essentially, prepaid cards are any cards that you can load with money to pay for things. Commonly, you will find many companies opting for fleet cards under this category. As mentioned in The Business Owner’s Guide To Fleet Gas Cards, these cards can be pre-loaded with money for your employees to use. In essence, they take the fleet cards with them when driving around, using them to pay for gas, lunch, and all other business-related expenses. The same concept can be followed with any type of prepaid card - it’s simply a card you load money onto for your employees to use. 

Unlike credit cards, you can hand out as many as you like to different employees. Unlike cash, you have full control over everyone’s spending and can track what they’re purchasing. As the overall account owner, you can see precisely where every transaction goes. You’ll see how much someone spends on gas, or if they buy a massive lunch that they really shouldn’t purchase. 

So, it lets you track your employees to ensure they aren’t overspending while also stopping them from using their own money. There’s no reason for an employee to claim they should be reimbursed if they have a prepaid card. Should they require more money, you simply load more cash onto the card as per their request. This can be useful in instances when there’s an emergency expense that isn’t usually factored into daily expenses. Plus, the more these cards are used, the more data you have to see exactly how much is spent every day. It could help you load less money on the cards in the future to save money.

Overall, using a prepaid card is the easiest way to avoid employee reimbursements. This streamlines your accounting and makes it so much easier to manage your expenses and cash flow. Similarly, a business credit card can be just as useful if you have a very small business. If it’s just you and two or three other people, there’s no harm in having a credit card that everyone can use. The larger your business gets, the harder it is to give credit cards to every employee. Finally, avoid handing out cash to your workers as it just makes everything so much more difficult than it needs to be.

5 Tips that will Help You to Take Better Care of Your Business Team

If you are a leader, then you should know that it is your ultimate responsibility to take good care of your team. A good leader will understand how important it is to make sure that all employees are looked after because they are the backbone of the company. If you can show that you care about the people who work for you, then they may be much more likely to do what needs to be done for your business. If you want to take things to the next level, then simply take a look below.

Be There

Sometimes you just need to be there. Employees really do need someone to advocate for them, and to be there when they are needed. When it comes to work-related matters, you need to be there for any issues that may arise. Some employees are too scared to ask questions, simply because they have no idea if they are going to get any negative feedback from the manager who they approach. If you can show that you are available to answer questions and if you can show that you can provide guidance, then this helps to send a message that you trust your workers. You also show that you trust in their opinion and the contributions that they have made.

If you want to take things to the next level, then you need to try and set up regular meetings so that everyone has the time needed to discuss issues that could well go onto affect the group. You can also schedule them on a regular basis so you can facilitate one-to-ones. If you can do this, then you will soon find that it becomes more than possible to hear concerns from staff members directly. By doing this, you can then address issues before they turn into major problems.

Provide Feedback

Another very healthy habit that you need to have as a leader is the ability to offer some degree of constructive criticism. If you know that someone is not performing to the best of their ability, then you need to let them know about it. Do not wait until things go wrong to tell them that something has to change. If you do this, then you may find that your team end up resenting you and that they end up having their feelings hurt. It is a very good practice for you to praise your team when they have done good work, as this will help to rocket their confidence and it will show a lot of appreciation as well. They will also not hesitate to follow you as a leader if they believe that you admire them genuinely.

Be Transparent

If you can be transparent and if you can be honest, then this will go hand-in-hand when it comes to good leadership. If you can be open and honest then this involves letting your staff know how good decisions are made and what plans you have in the future. By doing this you can then encourage a lot of cooperation, and this can help you to connect with them. If you can ensure that all parties understand each other, then this will inspire honesty across your business. It’s also one of the best ways to demonstrate employee care.

Provide Adequate Room for Growth

If you see that a lot of your employees are not growing as much as they could be, then you need to think about sending them on a training program. The great thing about training courses is that they encourage your team to grow closer to one another. Team-building activities also give employees the chance to pick up on new skills while also helping them to gain knowledge. The ultimate goal is for you to not only teach them but also motivate the workforce. Employees who participate in events like this, tend to perform better and they also stay with the company for longer too which is huge to say the least. These activities allow for much better communication between co-workers as they allow people to get to know each other outside of the working environment.

Listen

Quite often, leaders forget about the simple act of listening. Listening is a crucial part of good management. If you do not take the time to listen to your team, then you may miss out on crucial information that could actually be beneficial for your company. If you want to listen carefully then do not talk over your employee’s points when you are trying to explain your own. They may even hesitate to speak because they are worried that you are going to talk over them again. Make sure that you ask questions when required as this can help you to clarify opinions and also ideas too.