Reconcile out-of-pocket expenses and reimbursements with Zoho
Every company has its way of dealing with reporting out of pocket expenses. When employees have to incur a work-related expense on their own, they submit expense reports to get it back.
It can be a little complicated to collect bills and fill out forms. But this is only the tip of the iceberg. What happens on the other side of this process can be further chaotic for the involved teams.
Termed as payment reconciliation process, this involves updating and reconciling the expense with bank records. If the expenses are not accurately logged and updated, the company will have a hard time maintaining compliance.
When you ask a business owner to list their typical monthly expenses, out of pocket expenses spent by employees will probably be left out.
Though the company has a developed policy to regulate this and pay it back on a timely basis, it’s not given equal attention that’s given to other categories of expenses.
When your company is still small, and the team is growing, it can be hard to keep a tab on these expenses. Either most of them are auto-approved or denied straight away.
As you progress, this should change, and you should recognize your employees' expenses for accurate expense reconciliation.
If you don’t recognize and categorize allowed and disallowed expenses, your employees will have big-time confusion on what to report and what not to.
And admins will find it difficult to process the operating expense reconciliations. This is why it’s important to recognize out of pocket expenses at the earliest and educate your employees on the same.
Some of the typical out of pocket expenses that can pass off as expense reconciliation items are travel expenses (lodging, food, and travel tickets), office-sponsored meals, meals with clients, phone bills for company phones, office supplies used by employees, etc.
Companies decide allowable and disallowed expenses based on their available local tax exemption. Entertainment expense items like game tickets usually don’t qualify for tax deductions.
In some cases, they do, but with certain exceptions. Take all this into consideration when you are listing down the allowed reimbursements for your employees.
Zoho Suite has web-based expense software that companies can use to manage unreported out-of-pocket expenses that both businesses and employees incur.
The entire expense reconciliation process is automated; hence, there is no room for manual entry.
Indians spend considerable time on tax estimations, especially Indian businesses. This tax estimation and the percentage aren’t the same for all and vary based on the goods and services one sells.
Since there are different components in GST, and boards handle these, the calculations can get pretty intense and inaccurate.
For some categories, the GST percentage is 18%, and for others, it’s 12% or 0%. Specifically, out-of-pocket expenses are eligible for many tax exemptions.
To help you with this, Zoho expense reconciliation has auto GST and TDS calculations. So, if you enter the tax percentage for a respective expense, it automatically estimates and includes the tax amount in the software.
This feature will be very useful during tax filing and year-end expense reconciliation when the companies have to close their accounts.
Related read: How to manage employee reimbursements under GST rule
If you have just set up Zoho expenses in your organization, automatic categorization will not be possible.
But after two or three attempts, the software will gather insights about your payments and automatically categorize receipts and payments based on how they were done before during the Zoho books reconciliation process.
Zoho has merchant category mapping that it picks up over time. So when a similar expense pops in, it automatically categorizes it under the respective category.
Auto categorization during operating expense reconciliation keeps your expenses sorted and reduces time spent on petty tasks.
Receipts are crucial for out of pocket expenses reporting, especially if it’s a prepaid expense reconciliation. They must be stored to claim tax exemptions and meet local government regulations.
Zoho expenses software has an auto-scanning feature in it. If you keep it enabled when any of your employees upload receipts, it gets auto scanned and auto uploaded into the Zoho expense software.
The software then tries to match the payment amount, date, payment, and other available details in the receipt with the expense reconciliation items in the software.
Once it matches, it automatically maps the receipt with the expense. One can save a lot of time as the application painlessly works to keep your expenses organized.
Suggested read: Benefits of online receipt management over paper receipt
When a versatile and solidly-built software like Zoho meets a similar application, which is Volopay, the outcome will be further enhanced, accurate, and labor-saving.
Worried about how your out of pocket expenses are handled and reported? You need a smart, automated solution like Volopay.
Want to know what it can do to automate your employee expense reconciliation and reporting?
Why do you have to go for a separate reimbursement reporting and tracking solution when you have Volopay?
Volopay is where you can manage every business expense, from major to insignificant, petty payments. It also has an automated reimbursement platform.
But if you want to cut down time spent on reimbursing later, you can use Volopay corporate cards. Create and assign a card for each employee with a fixed, prepaid amount in it.
Employees can use this amount to book tickets, hotel rooms, meals, and parking expenses. You can see each payment they made reflected in the Volopay admin console with every detail.
They don’t need any approval to use the amount assigned to them unless they request more money. This way, you don’t make your employees incur out of pocket expenses.
The good news is that every expense made through the card gets reported in your Volopay software. And the prepaid expense reconciliation happens automatically when you connect Volopay with Zoho.
So, basically, every employee expense from Volopay, or any payment from Volopay for that matter, can be automatically synced with Zoho.
The payment reconciliation process is made possible due to the open API integration of Volopay. The expenses are reported, reconciled, and similarly, receipts are captured from Volopay to Zoho as well.
We have seen how simple Zoho books reconciliation is when you have Volopay as your expense management system. It’s not always possible to spend with prepaid money and process prepaid expense reconciliation.
At times, your employees go through out of pocket expenses for a variety of reasons. Volopay has a reimbursement platform where your employees can submit claims at any time.
The admin can set expense workflow to dictate where the claim request should go from start to end. Once the claim is settled, the operating expense reconciliation happens automatically with the Zoho if auto sync is enabled.
Businesses don’t wait for half-year or year-end to close their accounts and do expense reconciliation. It is possible to do something similar to everyday closing when you are not bombarded with manual typing tasks.
When expense reconciliation happens in a seamless manner, you can easily expect the above goals to be achieved. Volopay has built in a way to allow open integrations with applications like Zoho, Netsuite, etc.
When this integration is not in place, your accountants will have to download expense data and upload it or in worse cases, type them out to finish the payment reconciliation process.
Either it’s a long-drawn-out procedure, or it can trigger human errors. Inaccuracies in accounting especially in the operating expense reconciliation are not acceptable.
That’s why expense management software Volopay becomes desirable to connect one accounting application to another. To talk about Zoho books reconciliation, Zoho is already used by many Indian businesses due to its flexible nature.
Volopay allows you to manually choose the expense reconciliation items or automatically sync and update the data with Zoho. Zoho already auto-categorizes the expenses and matches the receipts on its own.
So, you don’t have to play around with the data much. When it comes to out of pocket expenses, Volopay presents you with two different options to steer them automatically.
Be it out of pocket expenses or any other business expense, you can schedule and pay it on time and finish expense reconciliation on the dot.