What is Expense Management and Reimbursement?
Expense management is a system that businesses use to process, pay and audit all expenses initiated by the employees. One of the most common examples that come under expense management is expenses incurred during a business trip for various things, including food, lodging, travel, transportation, etc. The key elements of this system are how any company would pay for these items and how they would monitor them.
Reimbursement is a way in which businesses pay back the employees for all business-related expenses that they spent from their pockets. Reimbursements can be given to employees for things like education, healthcare, business trips, entertainment, travel, transportation or petrol, and more.
Both expense management and reimbursements are significant processes, and managing them are daunting indeed. Although manual calculating methods have taken a back seat today, there are businesses that still practice manual calculations, which are both error-prone and cumbersome. There are others that use technology, but their software and technology are outdated. It is not possible for businesses to ensure accuracy in approvals, expenses, and reimbursements without advanced automated tools.
Optimization can help have a positive impact on the business and the best solution is to use payroll management systems. Using the services of a good payroll provider offers several benefits at various stages. It brings transparency to the process, is easy to use, saves time, and is cost-saving.
Using global payroll outsourcing services also allows the business to focus on other core elements of the business. Moreover, it is not just the business or the owner that benefits from it, but the employees are at an advantage too.
Payroll providers use highly advanced software where information is centrally available. It is easily available to be viewed, updated, approved, disbursed, and tracked. The bank account details of the employees are made available in the software, and the disbursements can be done directly to the bank account of the employees. Businesses can have complete visibility on all types of expenses and disbursements.
Some Features of a Good Expense and Reimbursement Management System
Some significant features of a good expense management system software include:
- Tracks all receipts of employees
- Allows employees to use their mobile phones to capture and upload receipts
- Arranges and places receipts in a centralized dashboard
- Documents company policies and spending limits
- Allows companies to change the policies and limits when necessary, by authorized people or employees
- If applicable, should be able to integrate with corporate credit cards
- Sends or routes the uploaded receipts to higher authorities for approval
- Manages approvals that are not appropriate or needs changes
- Ensure there are no policy violations
- Schedule reimbursements for payment disbursal
These are some of the features that a good payroll outsourcing company in India should offer when providing expense management and reimbursement services to any business.
Payroll Outsourcing Services and its Key Functions:
Some key functions of payroll outsourcing services include:
1. Compensation structuring and Salary Processing
One of the major functions of any payroll provider is to process the salaries of employees. Automation allows effortless calculation of all types of compensation (hourly rates, overtime hours, etc.), deductions if any, and processing of salary.
2. Filing Returns and Managing Payroll Taxes
The government of every country requires that the taxes be filed and paid on time too. Erroneous calculations and failing to file taxes on time can lead to penalties and legal action. Outsourcing payroll ensures that your taxes are filed, and the calculations are done properly. Taxes are impacted by expenses and reimbursements hence, easily adhered to without the business having to worry about dates or follow-ups.
Tax deductions and tax filing are done accurately through their advanced software, simplifying the complexities of tax calculations.
3. Salary Slips and Reports
Generating reports for the business, such as leave summaries, salary statements, etc., are also provided by payroll outsourcing services firms. Downloading forms related to payroll and printing pay slips for the employees are also done by the service provider. Reports are critical for all businesses and help in managing overtime, allocating resources, budget creation, and several other important business decisions.
They also require providing a detailed overview of the company budget, taxes and other data related to payroll. A good payroll service provider is one that is able to provide reliable data for the business.
4. Salary Slips
Every employee has the right to know the details of the salary that he has received. The salary slip is generated/prepared in compliance with the rules and regulations set by the country/state/city jurisdiction. It helps the employees to understand and validate the deductions or the compensations in various categories.
Payroll providers help in reducing possible risks of fines, penalties and prosecutions.
5. Payroll Integration
Third-party service providers providing payroll outsourcing services also ensure that they provide payroll systems that can easily be integrated with the existing system. This helps in saving effort and time. The data is updated automatically, and there is no need for any manual entries. This also offers data security, an important feature that is significant for all businesses. Accurate payroll keeps businesses safe from dissatisfied employees and other legal liabilities.
Advantages of Payroll Outsourcing
Expense management and reimbursements are an integral part of the payroll management system. Outsourcing the payroll of your business offers several advantages. Some of the advantages of using payroll outsourcing services are mentioned as below:
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Cost Reduction
Working with a payroll provider can help in reducing the direct costs involved in processing in-house payroll. Labor hours, computer software, program maintenance, printing, different payroll periods, training and support to staff, etc., are some of the major areas of expenses. Small and medium businesses may not have enough finances to bear the payroll processing-related expenses. Outsourcing the services helps in cutting down all these costs.
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Access to HRIS (Human Resource Information System)
Having access to HR information is beneficial for both the employer and the employees working in a business. It reveals detailed information about several business areas, which is extremely beneficial for the company. Here are some examples:
Employees: Some benefits that employees receive include:
- Review information of benefits received
- Review their salaries
- Are able to update personal information
- Can apply for their benefits online
- Are able to view corporate documents (that they are permitted to see) and more
Employer: Some benefits that employer receives include:
- Create customized reports
- View payroll reports and invoices
- Compensation reports
- Expense management reports
- Tracks PTO (Paid Off-Time)
- Performance Reviews
- Easy communication with employees
- Time reporting information
- Add new employees
- Certifications for employees
- Upload all benefits documents and plans
- Upload HR documents that all employees need to know about and more
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Avoid Penalties
Incorrect filings and late payments lead to penalties which can be hefty. Every year, the government collects a large amount of money against penalties paid by the companies. Moreover, there are several rules and regulations that keep changing and new ones are added to the list regularly. With advanced automated software to process payroll calculations, the payroll providers are able to deliver highly accurate calculations. They are also updated with the latest information on taxes and policies that are industry-specific, related to state, local government.
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Enhanced Security
Processing payroll is complex and always exposed to risks of embezzlement of funds, identity theft, tampering with company files for personal gain. Working online also exposes you to the internet hackers that may try to hack into your system or software. These risks are reduced when using payroll outsourcing services. They use highly advanced software that are secured by multiple server locations and daily backup. They use state-of-art systems to protect and store data.
Outsource Your Business’s Expense Management and Reimbursement to an Efficient Payroll Service Provider
Having served more than 900 clients in Asia, North America, Europe and Australia in the past 18 years, TopSource Worldwide has always provided reliable global expansion services. We are one one of the leading Payroll outsourcing company, have been providing customized services to all our clients for expense management, reimbursements, payroll, statutory compliance, employer of record and more. Working with a variety of industries and countries, we have gained immense knowledge and practice in taking care of different types of payrolls.
We always stay updated with the rules and regulations and keep you acquainted with the compliance and best practices required by the business in your country. We operate from a modern infrastructure equipped with highly secure systems and work to streamline and optimize your payroll management systems, so you are relieved of the services you have outsourced us.
