Introduction

With the introduction of advanced travel expense platforms like SAP Concur, for virtually all large companies, paper-based expense reports that are completed manually and processed manually are a relic of the past.  Today, expense reporting is a streamlined and highly automated process.  In addition, with the transition to having credit cards readily accepted everywhere, including convenience stores and ride-share and taxi companies, processes required to reimburse employees have also dramatically changed.

Before the centralization of processing activities in Shared Services, the people processing expense reports were often either the same staff or organizationally closely aligned with the people processing Accounts Payable invoices.  In addition, the balance due was often significant, so there was pressure to reimburse employees as quickly as possible.  As a result, the most common approach was to reimburse employees for any balance due through Accounts Payable, using either direct deposit to a bank account, or a paper check.

Today, any balance due to the employee for travel expenses is generally only for miscellaneous out-of-pocket expenses, which significantly reduces the demand from employees to be reimbursed as quickly as possible.  Processing these reimbursements through Payroll allows companies to keep employee information in one location, Payroll, without needing separate databases for bank account information, or having to create paper checks for travel reimbursements when a direct deposit is used for Payroll payments.

iPolling Results Review

A recent Peeriosity poll looked at whether employees were reimbursed for out-of-pocket expenses through either Accounts Payable or Payroll, with additional detail regarding how often employees are reimbursed.

The poll results indicate that 52% of Peeriosity member companies reimburse employees through Payroll, and 42% reimburse through Accounts Payable.  The remaining 6% use a mix of Payroll and Accounts Payable with salaried employees reimbursed using Payroll and some hourly employees reimbursed using Accounts Payable.

The next polling question looked at the frequency for reimbursement, with 50% reimbursing either weekly or daily, and 50% reimbursing either bi-weekly, monthly, or at a mix of approaches depending on the employee type.  Here are the details:

A few of the comments from members include:

• Even though we are currently reimbursing through AP we are getting ready to start a project to move the reimbursements over to payroll.

• Out-of-pocket expenses are submitted on a monthly report through Concur, which then sends a file to Payroll for payment to employees.

• As long as the expense report is approved and ready, we run them weekly through AP.

• Expense reports are submitted once a month and out-of-pocket reimbursed on the next semi-monthly paycheck.

• Most salaried associates are reimbursed through Payroll, but some hourly associates are reimbursed through AP.

• Since reimbursement occurs with Payroll – generally Bi-weekly but could also be weekly if an hourly associate incurs an OOP expense.

• The US used to go through Payroll, but we have transitioned it to Concur. All 60 countries are reimbursed through AP now.

• Reimbursement is done through their pay statement. Wage employees are paid weekly and salaried paid semi-monthly.

Closing Summary

Changes in technology and the acceptance of travel credit cards for most expenses have dramatically changed the need to quickly reimburse employees for any balance due on their expense reports since that balance is likely to be small.  As a result, these transactions are excellent candidates to be processed through Payroll, which can simplify the reimbursement process and increase the likelihood that the transaction is completed electronically via direct deposit.

Does your company process employee expense report reimbursements through Accounts Payable or through Payroll?  At what frequency does your company reimburse employees?

Who are your peers and how are you collaborating with them?

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