[et_pb_section bb_built="1" _builder_version="3.13" module_class="artical-insights-single custom_li_sec"][et_pb_row _builder_version="3.15" use_custom_width="on" custom_width_px="600px"][et_pb_column type="4_4"][et_pb_text _builder_version="3.15"]Having a distributed team has major benefits for both employees and businesses: it reduces turnover, increases productivity, and saves money on office space. However, providing equipment and reimbursements for employees who live hundreds of miles away creates extra challenges for finance departments.Telecommuting continues to grow in popularity. CNBC reports that 70% of the world works from home at least one day per week and, according to the 2018 State of Remote Work survey, 35% of companies have all or nearly all of their employees working virtually. Even if your own company has only a few remote workers, that's likely to change in the near future.
[source]Finance teams need to develop processes and guidelines for remote employees--the sooner, the better. There are a number of different options for supplying remote employees, but not all will be practical or scalable for your particular situation.
Purchasing processes for remote employees
Purchasing teams can choose from a menu of different approaches:
- Ship equipment to remote employees. Purchase the items for them and have them shipped directly to remote employees.
- Give remote employees a purchasing allowance. This can be a large sum when they’re hired or a small stipend every month.
- Reimburse work-related purchases. Have remote employees purchase what they need for their jobs and compensate them for those expenses.
- Provide virtual cards. You can issue a new virtual card for each purchase that your remote employee makes.
- BYOD (bring your own device). Remote employees can use items they already own.
Ship equipment to remote employees
The simplest option for supplying remote employees is to purchase the items for them and have them shipped directly to the employee. If you have a particular customized piece of equipment that you want your remote employees to use, this may be the only option.For example, Intuit hires large numbers of tax professionals who work from home. Because customer tax information is so sensitive, it’s important that they use very secure computers for this work. Intuit sends their employees laptops with built-in custom security features every January, and the employees ship them back to the company in May after the tax season ends.Purchasing employee equipment yourself ensures that employees have the right equipment for the task at the best available prices. By buying for several employees at once, you may be able to use bulk discounts and save a little extra.However, this approach does put more work on the finance team, and shipping costs can become prohibitive, especially for large items. If there are many remote employees to supply, it may not be a scalable approach.If you do decide to ship equipment, build a policy document spelling out exactly what items you'll send to employees and why you need to purchase those items yourself. This will make it easier to determine if you need to amend the policy in certain circumstances.
Give remote employees a purchasing allowance
Another option is to pay remote employees a set amount of money–either a large sum when they’re hired or a small stipend every month–to purchase whatever equipment or resources they need for the job. This approach works well for recurring expenses and setting up new employees.You might give remote employees a phone stipend to cover the costs of using their personal phones for business calls, for example. You could also give remote employees a company credit card to use for purchases, although this is best reserved for the most trustworthy employees.The purchasing allowance approach is quite simple for finance departments to implement and support. On the other hand, stipends can waste a lot of money through employee overspending. Employees may make poor choices about which work-related items they purchase, or they may simply pocket the stipend and not use it for business purposes.When using a stipend approach, start with an expense review to see what employees need to do their jobs and how much these resources cost on average. You'll also need to decide whether remote employees are allowed to keep the items they purchase or whether they must be returned to the company after they leave.[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row _builder_version="3.11.1" module_alignment="center" background_color="#00b3e3" make_fullwidth="on" padding_top_1="40px" padding_bottom_1="40px" custom_margin="||30px|" module_class="book-demo-wrapper download-report-sec"][et_pb_column type="4_4"][et_pb_text admin_label="Download Report Section" _builder_version="3.15" text_orientation="center"]
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Reimburse work-related purchases
Many businesses simply have remote employees purchase what they need for their jobs and reimburse them for those expenses. To prevent overspending, companies typically set a limit on how much they’ll reimburse for different items.For example, a company might allow remote employees to spend up to $50 per month on office supplies. Employees can pop into a store and buy a new stapler without having to wait for purchasing approval, then submit a reimbursement request.With this approach, employees can buy what they need when they need it using their own money, which makes for quick and easy purchasing. Employees are often the best judges of which products they need to do their jobs, especially those in highly specialized fields.Reimbursement systems tend to be difficult and time-consuming for both the remote employee and the purchasing department. Employees must keep track of reimbursement policies, keep and send in receipts, and fill out reimbursement request forms. Then the finance team must reconcile those forms with corporate policies.If you already have a reimbursement process for onsite employees, you should be able to easily adapt it for your remote workers. Be sure to draw up an itemized expense report that includes such expenses and have remote employees turn it in once a month or more often if necessary.
Provide virtual cards
Using virtual cards for employee purchasing allows finance teams to maintain control over spend. With the right software, it is a seamless process for remote employees.Employees with access to the software like Teampay can request a purchase at any time. For example, if a remote employee needs an item that costs $210, the employee can request authorization from the software, which routes that request to their designated approver (usually their manager or the finance team). Once approved, a virtual card is issued to the employee with a $210 limit to spend with the approved vendor.
Because each card number is used only once, it’s difficult to misuse these cards and they are less susceptible to fraud. Virtual cards are flexible and configurable, so finance teams can issue them to accommodate a variety of cases. For example, they can issue a virtual card whose limit resets each month to cover recurring costs, such as phone charges or subscriptions. Many virtual card providers have automation options, so finance personnel can set up the limits once and then virtual employees will automatically receive their monthly cards with no further intervention required.One downside is that one-time card numbers do make getting refunds a hassle since merchants won’t be able to refund the money directly to the card. They’re also not a great choice for travel expenses like rental cars and hotel rooms because travelers usually need to provide a physical card when they check in.Easily automated and configurable, virtual card programs are the most scalable purchasing solution. You will need to devote time to reviewing and revising your policies every so often, but your day-to-day time investment—and that of remote employees—will be minimal.
BYOD (bring your own device)
Remote employees often use their own equipment for some of their job duties. This approach makes a lot of sense for items that are relatively interchangeable.Employees working from home generally have their own desk and chair to use as a home office setup. Many remote employees also use their own smartphones to make business calls and do work away from their home offices.Having employees use their own equipment saves both time and money, and guarantees that employees have equipment they're comfortable using.However, some employee-owned equipment may not be up to the task. Computers are a perfect example: an employee’s home computer may not have the processing power or memory necessary to do the job, or it may not be secure enough to protect sensitive data. The 2018 iPass Mobile Security Report found that 94% of CIOs believe BYOD policies increase security risks.
[source]If your company chooses to allow BYOD, work with IT personnel to set policies for minimum security requirements for these devices, such as requiring the use of certain anti-virus programs. You'll also need to track which items the employee owns versus ones supplied by the company.
Minimizing fraud
Expense fraud is a major concern for any company. According to Accounting Today, U.S. companies lost around $1 billion to expense fraud in 2015. Throw virtual employees into the mix, and fraud can become an even greater problem.Warning signs of expense fraud include employees who spend far more than their co-workers, overly generous tips, duplicate transactions in the same amount (a sign that an employee may be splitting an expense that exceeds the mandated limit into two transactions), reimbursement requests for cash purchases, lack of receipts, large quantities of “miscellaneous” expenses, and excessively high reported mileage.You can deter expense fraud by implementing control policies such as:
- Requiring receipts for all expenses over a certain amount
- Checking card charges to confirm employees are using them for approved expenses
- Setting clear limits for different expense categories, such as travel per diems, and enforcing those limits
- Revising expense forms annually for clarity and aligning them with your current policies
If you see any fraud warning signs, subject that employee’s expenses to a microscopic review. It’s also important to decide in advance how you will respond to expense fraud.Possible courses of action run the gamut from firing the employee immediately to refusing further reimbursement to subjecting the employee to more stringent expense limits. Whichever policy you choose, you’ll need to apply it consistently or you’ll likely face discrimination claims.
Preparing to equip remote employees
Even if your company has no remote employees at present, it's best to develop specific and scalable remote purchasing processes and policies. This way when your company does start offering remote work, you'll be able to minimize waste, fraud, and investment of the finance department's resources from day one.[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
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