It’s no secret that the pandemic changed the way people work and companies operate, especially in regards to nonemployee expenses.
During the past year or so, organizations were focused on creating a more flexible workforce. Many turned away from traditional employment in lieu of bringing on more nonemployee workers, such as independent contractors and consultants. Your finance team may have noticed it firsthand with an increase in payments to nonemployees.
There’s evidence that supports this concept, too. Over a third (36%) of companies now reimburse nonemployee expenses, according to Emburse’s 2021 Travel & Expense Management Trends Report.
Less formality for nonemployee expenses
The bad news concerning this shift? Because nonemployees are a less-common facet of expense reimbursement, there’s often no easy way for these workers to submit receipts and Finance to process and reimburse these expenses in a timely fashion, Emburse explains.
More than half (59%) of companies don’t even have a formal T&E policy for nonemployees.
With no set policies or efficient processes, the door’s left open for time and money wasted in many forms – manual errors, fraudulent activity, even damaged relationships between companies and workers.
To avoid problems with nonemployee reimbursements in today’s more flexible workforce, companies should look to:
- Create or expand T&E policies for nonemployee expenses. Verify they’re reflective of the current times and clear for both your own finance staff and the workers they’re reimbursing. It could help to go over the policies with several trusted nonemployees or unbiased people to get an outside perspective. Ask: Are they straightforward? Is anything unclear or potentially problematic?
- Look to implement a more efficient nonemployee expense reimbursement process. Nowadays, many software providers are adding a new “piece” to their travel expense management systems that accounts for nonemployee expenses. There are also smaller-scale apps that could help streamline some of the tedious steps for nonemployees and Finance alike.