what is reimbursement_cover

What Is Reimbursement? Definition, Types and Templates

A. What is reimbursement? 

Reimbursement is a monetary payment made by an organisation to an employee for expenses incurred with his/her own money, and also includes the compensation made by an organisation to customers or third parties who have spent on business-related expenses. In a nutshell, reimbursement is money paid to an employee, a customer or third party as repayment for a business expense.

B. Types of Reimbursements

what is reimbursement_types

The following are the 3 common types of employee reimbursements: 

1. Business Expense 

(includes the following items, but not limited to them)

  • Office consumables and equipment/tools
  • Trainings, courses and continuing education
  • Hotel conference room charges
  • Entertainment – meals/gifts/any other forms
  • Staff relocation costs
  • Company outings and staff awards

2. Travel and Mileage 

  • Overseas business flight/train/bus tickets, car rentals and taxi fares
  • Meals 
  • Accommodation
  • Local transportation – fixed daily travelling allowances or by car mileage

3. Healthcare 

  • Medical fees – by General Practitioner or Specialist
  • Dental fees – by General Practitioner or Specialist
  • Hospitalisation fees 

Building a reimbursement form

Here are four steps to consider:

  1. Determine reimbursable expenses
  2. List reimbursable expenses
  3. Outline pre-approval process
  4. Submission process

1. Determine reimbursable expenses                                              

Establish all rules and guidelines that clearly outline what comprises a reimbursable expense, before spelling them out in the expense policy for employees to follow. In doing so, employees’ submissions for reimbursement will be in line with the company’s requirements for making claims. Payment method and payment timeline must be indicated in the expense policy.                      

An example of a company rule or guideline: Employees shall not incur any expense on products manufactured by an industry competitor. 

2. List reimbursable expenses 

For each type or category of reimbursement, create an exhaustive list of allowable expense items as shown above under Point B. 

3. Outline pre-approval process.                                                        

Prior to making an expense, a pre-approval must be sought from the department head or manager. This is to prevent and protect both the company and the employee from making unauthorised expenses. Pre-approvals must be presented in the submission for reimbursement.

4. Submission process

Finally, proof of expense (receipts) and proof of approval of the expense should be attached alongside the submission. 

Execute your process with Forma

what is reimbursement_expense claims

Automate reimbursement requests using Forma for easier management and higher efficiency. Moreover, you don’t need to build your own forms from scratch. Simply choose from one of our ready templates, such as the expense claims form as shown above.

what is reimbursement_workflow

Once you’re done customising your template, you can move on to design your drag-and-drop workflow as depicted (or in any other way you wish). After users have submitted their form, the following steps will proceed as ordered in your workflow.

Visit Forma today to begin automating your business processes!

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