Guide · Updated October 2026
An expense reimbursement process for small businesses
A sound reimbursement process has six steps: capture the receipt, submit on a rhythm, approve, prepare the payment, pay through payroll, and record. Here is each step and the controls that go with it, whatever software you use.
The six steps
- Capture at the moment of spendingThe receipt is photographed or saved the day it happens. A receipt found three weeks later is the source of most errors.
- Submit on a rhythmWeekly for travelers, monthly for everyone else. One report per period, not one per receipt.
- Approve with contextThe approver sees the receipt, the amount, the category and the policy check. They approve or return with a reason. They never edit the figures.
- Prepare the paymentFinance groups approved reports into one batch per pay date and checks who is being paid and to which account.
- Pay through payrollReimbursements go into the payroll run as a separate, non-taxable pay item where your plan allows it. One upload, one payment date, one place to look.
- Record and reconcileMark the batch paid, tell the employees, and post the month's expenses to the ledger by category.
Controls that cost nothing
An auditor or a bank will ask about these. They are easy to build into the process on day one and painful to add later.
- No self-approval. Not for the owner, not for finance. If the usual approver is the submitter, someone else decides.
- Two people on every payment. The person who prepares the batch is not the person who releases it.
- Changed bank details wait. If an employee changed their account recently, confirm with them by phone before paying to it. This is the single most common fraud in small companies.
- A record of every decision. Who approved what, when, and why it was returned. Email threads do not count.
- A deadline. Expenses older than your window are not reimbursed without an explanation. It keeps the books current and stops the surprise claim.
Why payroll rather than a separate payment
Paying reimbursements through payroll means one payment run, one set of bank details that payroll already holds, and a payslip the employee can see. It also keeps reimbursements visible to the person who prepares year-end pay statements, which matters if any reimbursement turns out to be taxable. Separate checks or transfers work too, but they create a second set of records to reconcile.
Most payroll systems accept an "additional pay" upload. A file with the employee code, the amount and a pay item is all they need.
What software should do for you
Whatever tool you choose, it should remove the typing and enforce the controls, not just store PDFs. Reimgo does the steps above like this:
- Receipts are read from a photo into a draft expense that the employee checks.
- Policy rules are checked when an expense is saved and again at submission, and explained in plain words.
- Workflows route to the right approver, and self-approval is off by default.
- Approved reports go into a batch that a second person releases by default, with an authenticator code; nobody can release a batch that pays themselves, and recently changed bank details are held.
- The payroll import file is produced once, frozen and fingerprinted; your payroll pays, finance marks the batch paid and employees are told.
- Report lines export with category codes for the ledger.
This page is general information about running expenses in a business. It is not tax, legal or accounting advice. Check your own obligations with a qualified adviser.
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