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What Are the Different Kinds of Reimbursement Policies?

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  • Written By: Lainie Petersen
  • Edited By: Jenn Walker
  • Last Modified Date: 15 March 2014
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Many organizations and businesses have reimbursement policies in order to repay employees who spend their own money on supplies, entertaining business associates, or while traveling on company business. Most companies have standard policies regarding authorizations, forms, and time frames. Companies may also segregate reimbursement policies according to the nature of the expense. Types of reimbursement policies include specific guidelines for the nature of the expense, such as school tuition, travel, transportation, supplies, or healthcare, as well as an approval process that segues with the organization's bookkeeping system.

Organizations are often concerned about the misuse of reimbursement policies and establish policies intended to prevent employees from requesting reimbursement for non-work related expenses. Many employees are required to get permission for an expense, such as a pre-approval of travel plans or educational courses. Accounting departments often develop spreadsheets and forms that must be completed in order for an employee to claim reimbursement. In addition, employees are typically expected to save invoices, bills and receipts to submit with reimbursement paperwork.

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Travel and business entertainment reimbursement policies are often very detailed and may set flat rates for expenses such as meals, or they may simply state a daily spending limit. Some organizations require employees to arrange their travel through an in-house or contracted travel agent, who may be required by company policy to seek out the most economical hotels or flights. Some travel reimbursement policies also may restrict the purchase of alcoholic drinks, even if the cost of the beverage is within meal budget guidelines.

In addition to travel and business entertainment expenses, other types of reimbursement policies address an employees' self-development. For example, a company that has a wellness program may also offer a healthcare reimbursement policy that helps them pay for weight loss systems, gym memberships, smoking cessation programs and other types of wellness services not covered by insurance. Many employees take advantage of company tuition reimbursement policies that can help them pay for school as well. Many companies pay for continuing education classes, but may also reimburse the cost of college-level courses if the employee can demonstrate that taking the classes will improve his job performance.

Some companies streamline their reimbursement policies by issuing some employees corporate credit or charge cards. These cards are to be used exclusively for business expenses and can help both the company and employee with tracking expenses and reimbursements since all expenses will end up on one, single bill. Corporate policy typically restricts the use of these cards to executives and other high-level employees, though sales staff or other employees who must regularly travel or entertain may also be assigned corporate cards. In some cases, the company pays corporate credit card bills directly, while others may require the employee to pay the bill and complete the expense reimbursement process as he would for any other expense.

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