We get it—with everything else you’re juggling for your business, it’s easy to think slow reimbursements are harmless and the least of your worries. However, slow repayments hurt your company more than you realize.
What’s “slow”? Think of it from an employee perspective. At a minimum, expense reimbursements should match a biweekly payroll cycle, so employees don’t get stuck paying monthly interest on expenses charged to their personal card.
A timely and efficient process for reimbursing employee expenses is crucial to the well-being and engagement of your employees as well as the future growth of your company. Because slow reimbursement strains employee relationships, reduces productivity and causes liabilities, companies should prioritize fast expense processing.
Jump to the section of this article that interests you most:
- What is expense reimbursement?
- The negative effects of slow employee expense reimbursement
- How to speed up expense reimbursement
- Put an end to slow expense reimbursements with Ramp
The negative effects of slow employee expense reimbursement
Let's unpack the consequences of slow expense reimbursement.
1. Erodes employees' personal finances
Slow repayments make employees feel that your company doesn’t care about their personal finances. This is understandable when you consider two in five employees experience cash flow issues because of slow expense reimbursement.
Employees can also face personal finance liabilities. For example, if a team member uses their own money to cover expenses on a business trip and then they have to wait a long time for their reimbursement, they may not be able to pay their bills within a reasonable time frame. That team member may face late fees, interest charges, and declines in their credit scores due to slow reimbursements.
"Two in five employees experience cash flow issues because of slow expense reimbursement"
Because of this, employees may even avoid opportunities to nurture clients or develop skills—like a business conference or cocktail hour—because they’re nervous the expense won’t be reimbursed to them in a reasonable period of time. As a result, opportunities to build deeper business connections with customers and prospects are lost, and with them, business growth.
2. Compromises employee relationships
Not only are employees struggling financially because of slow expense reimbursement, but a recent PwC survey found that 57% of employees would be attracted to another company that cares more about their financial well-being than their current company.
"If your repayment process hurts employees’ personal finances, they may feel uncared for by the company"
Imagine you have a friend who regularly borrows money from you but always repays you weeks after she says she will. You might not be bothered at first, but over time you’ll likely start to wonder whether she is a good friend or someone just taking advantage of you.
Slow reimbursements in the workplace aren’t so different. Some companies operate without a proper reimbursement plan in place. For example, these employees go on a business trip for which they have to pay their own hotel and travel fees. Those employees then have to wait more than a reasonable amount of time for their travel expense reimbursements to kick in and cover their trip. This can strain employees’ relationships with each other and diminish their perception of the company.
If your repayment process hurts employees’ personal finances, they may feel uncared for by the company and that the expense reimbursement policy favors the company's time, not theirs.
“We are required to submit expenses within 24 hours of trip completion, but I have been waiting over 30 days for payment,” one employee on the Proformative finance forum said.
If that resentment builds in employees, it can slowly erode your company culture.
3. Causes employees to be less productive
Employees are less focused on work when they’re shouldering high financial stress. According to a study by Financial Health Network, 78% of employees with high financial stress say it impacts them at work, even more than work, family, or health-related issues.
Slow reimbursements contribute to the financial stress. One reason why they take such a long time is because many organizations still rely on manual expense reporting. According to the Global Business Travel Association, it takes 20 minutes to fill out a single expense report, pulling time away from core job responsibilities and causing productivity losses across the organization.
"It takes 20 minutes to fill out a single expense report, pulling time away from core job responsibilities"
Expense managers will also have to spend 18 minutes correcting each form, on average, and even more time sending reminders and answering policy questions instead of processing reimbursements.
4. Creates liabilities
A slow expense reimbursement process isn’t just hurting your company’s financial culture, but it also can create corporate and individual liability.
According to financial expert and chief operating officer at fst, Daniel Diaz, companies run the risk of having to restate their books if reimbursements are not posted until after closing because of a slow process.
“If an employee had a legitimate expense, there is no mechanism in place to force this employee to file on time,” says Diaz. “And, if it's a large expense, it may force a company to restate their books post-closing.”
"A slow expense reimbursement process isn’t just hurting your company’s financial culture, but it also can create corporate and individual liability"
Restating your books would involve reopening already reported P&L reports, accounting for the expense, and then resubmitting to stakeholders, all of which can affect financial forecasting as well as investors’ confidence.
Employees face liability of a different sort. The IRS has dictated a 30/60 rule that states workers must submit employee business expense reimbursement requests within 30 days of the expense being incurred. But if the employer doesn’t reimburse within 60 days, then the amount will appear on their W-2, and they will be held liable for taxes on the amount when filing income taxes, as it were a part of their regular gross income.
How to speed up expense reimbursement
Now that you understand how slow expense reimbursement is hurting your team and business, let’s talk about solutions.
First, modern expense management platforms like Ramp reduce the need for employee reimbursements almost entirely. The latest software makes it easy for finance teams to issue corporate cards with built in controls. If reimbursements do come up, increase the speed of your reimbursement process by using integrated tools and clear policies.
1. Minimize employee reimbursements
With unlimited virtual and physical corporate cards available through modern expense software, personal cards are rarely necessary. Employees should use software to quickly request cards as needs arise and route those requests for approval.

Issue cards with personalized card controls. Now there’s no guessing what’s approved or not. These digitized policy controls save card controllers time spent answering questions while still ensuring employees are following policies.

Automate expense policy enforcement (like reminders to submit receipts at the point of purchase), so employees can spend less time asking questions and finding documentation to fill out expense reports. This automation also makes the software the “bad cop,” so these interactions don’t strain relationships between colleagues.

2. Enable fast employee reimbursements
For the rare occasions when work-related expenses can't be put on a company credit card, make sure you have a clear expense policy in place. Check out Ramp's expense policy generator for more information
It should include clear guidelines on:
- Actual expenses that are eligible for reimbursements, e.g., "Any necessary, reasonable, and actually-incurred expense that an Employee personally pays for as part of authorized Company business."
- Submission timelines, e.g., "Employees should submit expenses to be reimbursed as soon as possible, and no later than five (5) business days after month-end."
- Process for requesting reimbursements, e.g., through your finance automation software.
- Required info, e.g., date of the transaction, merchant name, amount spent to be reimbursed, detailed description of the transaction.
- When employees can expect payment, e.g., 15 business days after month-end.
- Consequences of late reimbursement submissions, e.g., "If the Employee’s request is submitted later than 5 business days after month-end, the Employee can expect payment within the first two weeks of the following month. Expenses submitted more than two months late may be treated as taxable income to the Employee per IRS rules, which may result in tax withholding from the Employee’s paycheck."
In addition to clear policies, use expense software that centralizes reimbursements for personal card usage and corporate card management to reduce context switching and streamline processes. The software should let employees forward receipts via email, extract reimbursement details for review, and automatically route reimbursement requests for approval.

With a platform automatically handling reimbursements, your company no longer has to worry about time-consuming manual expense reimbursements.
Put an end to slow expense reimbursements with Ramp
Ramp offers unlimited cards with individualized card controls and expense management software that speeds up reimbursements through automation. Our platform gives employees the confidence and tools to make purchases that move your company forward while safeguarding your goals through top-down card controls. Your employees can focus on growth instead of expense reimbursement forms.
Are you ready to start saving time and speed up your expense reimbursement process? Get started with Ramp.