Reimbursable expenses are costs that an employee incurs on behalf of their company or organization, and are later reimbursed by the employer. However, before incurring these expenses, it is important to have a prior agreement in place. This agreement serves as a safeguard for both the employee and the employer.
The first step towards having a prior agreement on reimbursable expenses is to outline what expenses are considered reimbursable. This list can include expenses such as travel, meals, lodging, and other necessary expenses incurred while on company business. The agreement should clearly state what expenses will be reimbursed and what documentation is required for reimbursement.
Once the list of reimbursable expenses has been established, the agreement should specify the maximum amount that can be reimbursed for each expense. This is important to prevent employees from overspending or claiming expenses that are not necessary for the business.
Another important aspect of the agreement is the process for submitting and approving reimbursement requests. The agreement should outline the necessary documentation and receipts that must be provided, as well as the timeline for submitting requests. It is also important to detail who is responsible for approving reimbursement requests and the timeline for doing so.
In addition, the agreement should address any potential disputes that may arise. This can include situations where an expense is rejected for reimbursement or where an employee has gone over the maximum reimbursement amount. The agreement should outline the process for resolving disputes and the steps that employees can take if they feel their expense has been unfairly rejected.
Finally, it is important to review and update the agreement regularly. As expenses and business needs change, the agreement should be adjusted to reflect these changes.
In conclusion, having a prior agreement on reimbursable expenses is crucial for both employees and employers. It provides clarity on what expenses are reimbursable, how much will be reimbursed, and the process for submitting and approving reimbursement requests. By following these guidelines, both parties can avoid disputes and ensure that business expenses are handled in a transparent and efficient manner.