Today, as more businesses implement work from home policies to protect the health of employees, a few essential changes are needed to be made. A robust travel and expense policy must ensure that all the existing business policies and responsibilities are correctly amended. As a part of the review, finance departments require to provide clear guidelines on staff expenses- what can be claimed and cannot be while working remotely.
Let’s take a look at how to update the policy.
Review the Existing Expense Policy
If the policy fails to cover remote working explicitly, then it needs to be added. Reasonable documents/agreements must be made in order to make sure that workers don’t get hit financially by the new arrangements while balancing potential cost advantages of staff not having to commute.
Any updates and changes made to the organization rules must be communicated and form part of the remote working policy guide, covering the primary employer responsibilities.
What Can Remote Employees Claim
The remote employees must be able to claim additional expenses that are incurred entirely for corporate purposes. Costs, which are the same irrespective of where the staff is working, must not be included. The challenge for finance departments is trying to distinguish between the two categories. Here we present a few significant areas.
If working from home needs additional equipment to be purchased, these expenses may need to get reimbursed. It may be for buying a software solution license that is needed for business requirements. These expenses are mandatory. Employees will have the necessary infrastructure needed for remote working like a laptop. Managers can also take a look to transport existing infrastructure to the employee’s home.
If workers do not get access to the office to stock up envelopes, paper, ink, and more, such expenses need to get covered by a good expense policy. Depending on the time remote working polices are going to be in place, managers can also see the relative expenses of sending out office supplies to all remote employees.
Electricity, Phone, and Broadband Bills
If a staff pays out some additional electricity expenses resulting from working remotely, these must be reimbursed. Such costs are legitimate if they are beyond the average running costs incurred if the staff was in the office.
If an employee’s landline is being used for office calls, these costs need to be reimbursed. Itemized bills must help to ensure that personal calls and businesses are kept separately If working from home is continued for an extended period, businesses can consider setting up a designated broadband connection to keep costs under control.
A few house insurance policies will include exemptions for anything, which is deemed professional. For complete coverage, a remote employee may need to take out a dedicated corporate policy. Additional expenses need to be reimbursed. The checks should be made to make sure that the insurance doesn’t cover business-owned equipment used by the employee.
Things Employees Cannot Claim
Policies for remote workers shouldn’t cover expenses incurred irrespective of where the staff is working. It includes rental expenses, property maintenance costs, mortgage, and more.
Tracking and Managing Remote Employee Costs
With finance departments working remotely, using digital application means that expense management can continue as normal. Depending on paper documents must be eliminated with claims managed digitally. Cloud-based expense management solution enables remote finance team members to continue handling and tracking costs, with real-time access to submitted claims. Using an expense management tool via a smartphone makes a completely paperless operation.
For employees operating with a paper-based system, claimants can be provided instructions on how to begin submitting information digitally. Paper receipts can get converted into digital images by using a phone camera and sent as mail attachments. Generating a single email address or online storage account where all claims are sent will help in keeping the procedure manageable for remote working finance employees.
Tax Implications of Working Remotely
As part of the upgraded process, finance departments must check out how appropriate tax authorities treat remote worker experiences. It is a complicated area with the tax authorities searching to offer clear guidelines. With remote working, which is now considered crucial, as opposed to an optional arrangement, it could transform the way that expense costs are managed.