Your employees lay out the cash for business related expenses and then the company reimburses them at a later date. Sounds like a good plan, right? Au contraire
. This is a major point of stress for employees who must juggle their personal finances as a cost of doing business.
Put Yourself In Your Employee’s Shoes
Most of the time, thinking like an entrepreneur is an asset. Sometimes, however, you have to slip on the employee uniform and take it for a spin.
Imagine that you're a young, ambitious professional. You're thrilled with the opportunity to get in front of clients and attend trade shows, but you're facing three business trips in a row, and your company requires their employees to front the cash. Between your rent and student loans, you don't have a spare penny to your name. Most of your credit cards have three-figure limits, so charging airfare and a hotel stay is next to impossible.
This is the conundrum that many young professionals face. Many are fresh out of college with no credit to their names. In fact, 20% of millennials report dissatisfaction with their current financial status
, so the burden of shelling out thousands of dollars adds to the frustration.
Allow Your Employees to Save Face
Your younger employees might not have wads of cash at their disposal, but they don't want to admit it. Imagine walking into your boss's office and explaining that you can't take a big client out to lunch because you can't afford the restaurant bill. It’s a deep hit to employee morale, and the risk of losing fresh talent hangs in the balance.
When the average cost of a domestic business trip
is $949, there’s a good chance that rent money is being used to fund a client meeting across the country. Few people would be willing to admit that waiting for an expense reimbursement is threatening their livelihoods. By updating expense management systems with a prepaid card and real-time expense reporting, employees have access to capital that they need for travel and entertainment.
Encourage High Performance
When your employees are forced to squeeze the life out of every penny in their pockets, they can't do their jobs as well. They're more focused on how they'll pay their bills than on boosting the company’s bottom line.
Even if expenses don't put them in financial jeopardy, the complicated and cumbersome process of creating expense reports takes time away from being productive – and cuts down on the time that could be spent on innovating other areas of the business.
Trash the Reimbursement Process
Traditional expense reporting
might seem like the only way to handle employee expenses, but new processes have been developed to make expense reporting quick and painless. A single web-based platform logs every transaction, eliminating receipt collection and reimbursement forms. No more spreadsheets, no more waiting 4-6 weeks to get reimbursed.
Preauthorized spend enables employees to spend money on business expenses that are necessary to doing their jobs well.