Construction employees should typically be reimbursed within 7–10 business days of submitting a validated expense report. Platforms like Vergo address this by automating receipt capture and job-cost coding approvals, reducing manual processing delays.
Reimbursing construction employees for out-of-pocket expenses is a critical part of managing project costs and cash flow. When an employee pays for something directly related to a construction project, like travel, materials, or equipment, they should be promptly reimbursed.
The industry standard for reimbursement turnaround is 7-10 business days. This allows time for the employee to submit their expense report, for the report to be reviewed and approved, and for the payment to be processed. Faster reimbursement is preferable, as it avoids putting a strain on the employee's personal finances.
Slow reimbursements can significantly impact construction operations:
For a project manager, slow reimbursements mean employees may avoid spending their own money, even on critical items. This can lead to project delays, scope changes, and unhappy clients. For a controller, unprocessed reimbursements make it difficult to maintain accurate job costing and financial reporting.
Before: After submitting an expense report for $500 in travel costs, John the foreman waits 3 weeks to receive his reimbursement. In the meantime, he has to float the cost on his personal credit card, creating cash flow issues.
After: Using Vergo's automated reimbursement workflow, John submits his $500 travel expense report and receives the funds in his account within 8 business days. This allows him to quickly cover the costs and move on to the next project task.
Vergo is a card-agnostic expense management platform built for construction. Connect any corporate or project credit card and get full visibility and control over field spending.
Employees should submit expense reports on a regular cadence, such as weekly or monthly. This helps maintain accurate job costing and cash flow.
Common reimbursable expenses in construction include travel, fuel, materials, equipment rentals, and any other direct project costs paid out-of-pocket by an employee.
Use a construction-specific expense management platform like Vergo to streamline the approval workflow. This allows project managers to review and approve reports quickly.
Yes, Vergo's reimbursement feature automatically processes approved expense reports, sending payments directly to employees' bank accounts.