What is an outlay?
If you pay for something out of your pocket that you will later be reimbursed for, this is an outlay. This means you are advancing money for the person who will pay the expense until you get your money back.
This often happens in work situations, but it can also be that you advance money for a friend if they have forgotten their wallet at home.
You can manage your outlays digitally and efficiently with Acubiz
Using a digital tool to record employee expenses on your phone saves time and ensures the quickest possible reimbursement.
If an employee has an outlay in connection with their work, it must typically be documented with receipts and approved by the employer before refunding the employee.
Below are four typical examples of business-related outlays:
Breakfast: You take turns buying breakfast for the office, and you usually pay with your personal credit card until your employer reimburses you.
Office supplies: More office supplies are needed, so you buy them and pay for them yourself until you are reimbursed.
Fitness: Your workplace pays all or part of your gym membership, which is set up through your own account.
Meals: You need to buy lunch for a meeting, so you initially pay for it out of your own pocket.
Pros and cons of outlays
An advantage of outlays is that it can often be faster to acquire what you need at the moment. It is, therefore, easier to pay immediately and settle the accounts later. Another advantage is that it helps to ensure the availability of the goods or services you want when necessary.
A disadvantage is that it can affect an individual employee’s finances if high amounts are involved. If an employee makes several outlays every month, it is not the best solution.
Employee outlays or corporate cards?
Today, several companies use corporate cards. But it is important to remember that a corporate card is not the same as an employee outlay.
When an employee uses a corporate card, it is still the company itself that is responsible for payment of this payment card – even though the employee is the bearer and user of it.
Using a corporate card will not overload an employee’s personal finances with various outlays. This will also result in a more accurate overview of their expenses each month.
From the company’s perspective, there are also several advantages to using a corporate card, as the company can digitize and automate the entire bookkeeping process.
The specific difference between outlays and a corporate card
With an employee outlay, the employee advances money to cover an expense related to work. The company later reimburses the amount to the employee, which is why there is often a need to document the expense.
A corporate card is a credit card issued by a company. The card can be used to pay for work-related expenses such as travel expenses or office supplies. The company can typically see an overview of the transactions and expenses made with the corporate card.
An outlay can often be an administrative burden for companies, whereas a corporate card is much easier to handle.
Do you want to know more?
We work to make expenses and reimbursements easier for both employees and companies by offering digital solutions for managing outlays for this specific purpose.
We can help automate document management and bookkeeping by connecting Acubiz to your corporate card and accounting system. This allows employees to avoid personal expenses while increasing efficiency by making business-related payments easier.
Contact us if you want to know how we can help your business or book a free online demo to learn more.
FAQ
What is an outlay?
What is an employee outlay?
An employee outlay occurs when an employee pays out of their own pocket for something, which the employee is later reimbursed for. In other words, it means that the employee fronts money on behalf of the employer, who will bear the expense until the employee is paid back.