Accurately managing and tracking employee billable expenses is a critical task for any small business owner. But if you feel overwhelmed by the thought of having to stay on top of all the details involved, you are not alone. In this blog post we will provide an overview of what these expenses entail and explain why they are important. We will also go into detail how tracking them can make life easier for both employers and employees alike. So let’s dive right in!
What Are Billable Expenses?
Billable expenses are costs that a company incurs in order to provide a service or product to a customer. These expenses are usually reimbursed by the customer, and may include things like travel, meals, and office supplies. In order to be considered billable, the expense must be necessary for the job and approved in advance by the customer. Billable expenses can also be tracked in real-time with software and tooling, making it easier for business owners to monitor billable expenses for their employees.
Why Is It Important to Track Your Employee Billable Expenses?
Tracking employee billable expenses is an important part of running a successful business. It allows businesses to save time and money, as well as ensure that the customer is being provided with accurate information about their costs. By tracking these expenses in real time, businesses can also be sure that they are not overspending or incurring unnecessary costs. This helps keep the business from falling behind financially and allows them to focus on providing quality services or products to their customers.
By tracking employee billable expenses with accounting software like Minute7, businesses can save up to 70% of their time. It also makes it easier for both employers and employees to keep track of claims, approve or deny reimbursement, and assign payments. Furthermore, taking photos of receipts and storing them in the Minute7 makes it easier for companies to provide evidence when itemizing expenses and billing customers.
What to Consider When Setting Up a Reimbursement System
When setting up a reimbursement system for employee billable expenses, there are a few things to keep in mind. First, businesses should agree in advance with their clients regarding what expenses will be reimbursable. This helps to avoid any misunderstandings or disagreements later on. Second, businesses should always provide supporting evidence when itemizing expenses and bill the client within a reasonable amount of time. Finally, businesses should always track their reimbursable expenses, as they can add up to a large amount over time.
Tips to Help You Manage Employee Billable Expenses
- 1. Managing employee billable expenses doesn’t have to be a daunting task. Here are some tips to help:
- 2. Categorize expenses as either administrative or operational expenses. Employee salaries are considered operational expenses, while rental costs are an administrative overhead.
- 3. Consider providing fuel costs for employees who need to travel as part of their job.
- 4. Provide the best tools and access to employees that will help with productivity levels.
- 5. Offer to cover telecom costs for positions with a lot of calls, such as sales roles.
- 6. Automate the expense reporting process with software like Minute7 to save time and eliminate data entry.
- 7. Understand the tax implications when creating and tracking employee billable expenses - only 50% of reimbursed expenses can be deductible according to IRS rules.
- 8. Follow Sarbanes-Oxley Act regulations by having management certify accuracy of financial information and enforcing penalties for fraudulent activity.
Top Reasons Automating Employee Reimbursements Can Make It Easier
Automating the employee reimbursement process can be a huge help for any small business. Automating these processes allows businesses to save time and money, reduce errors, and provide a better customer experience.
One of the biggest benefits of automation is that it makes it easier for both employers and employees to manage their expenses. With Minute7, businesses can connect their bank accounts in minutes, take photos of receipts and store them in the cloud, assign a client to an expense and mark it as billable, and then invoice. This helps streamline the reimbursement process so that everything is done quickly and accurately.
Another bonus of automating employee reimbursements is that it helps businesses stay compliant with Sarbanes-Oxley Act regulations. By having management certify accuracy of financial information, businesses can ensure they are always in compliance with all laws.
Accurately tracking and managing employee billable expenses is an important part of running a successful business. By understanding what these expenses are, why they are important, and how to manage them, businesses can save time and money while providing their customers with accurate information.
Using software like Minute7 is the best way to automate the expense reporting process and stay compliant with Sarbanes-Oxley Act regulations. Minute7 makes it easy for businesses to connect their bank accounts in minutes, take photos of receipts and store them in the cloud, assign a client to an expense and mark it as billable, and then invoice– all while saving up to 70% of their time.
If you’re looking for an easy way to manage your employee billable expenses, click here to sign up for Minute7 today!
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