Allowance Assessment: Your Guide To Using Employee Allowance Programs

by Avinash Reddy on April 24, 2018

 

Employee_Allowance

 

As an ecommerce company that targets employers, the greatest thing you can do is make your clients’ lives easier. Not only can your products likely save them time, effort, and money, but the way you organize your ecommerce site can also simplify their shopping process. With multitudes of ways companies can choose to organize their Employee Programs, it can be hard to keep track of it all. One of the most effective way is by adopting employee allowance programs for your clients:

What Is an Employee Allowance Program?

An employee allowance program is an arrangement where employers set aside a certain amount of money for their employees to spend on your products. In such a program, the employer will typically set up an account or group of accounts for their staff to use on your website. Any orders made through these accounts will be paid for from the allowance program, up until that money is exhausted.

How Can an Employer Leverage This?

Employers can use allowance programs to reduce their administrative responsibilities without threatening their budgets. If employees are able to make business-related purchases on their own, their managers don’t have to spend time and effort coordinating such purchases. But many employers are unwilling to let them do this for fear that they will spend company money with abandon. An employee allowance program limits workers’ total spending, so managers can give them the freedom to order on their own without worrying about waste.

What Are the Different Types of Employee Allowance Programs?

Employee allowance programs take many forms, including:

  • Individual Allowances- In this type of program, the employer will set aside a certain amount of money for each employee to spend on business purchases. This requires creating an individual ecommerce account for the employee so that they can order separately from their coworkers.
  • Group Allowances- Instead of setting aside separate allowances for each worker, employers can provide a single sum for their entire staff or for everyone in a particular group or department. This is ideal if employers can’t predict how much each individual will order, but can anticipate the total amount of money they will have to spend on business purchases.
  • Hybrid Accounts- Both for individual and group accounts, employers can combine allowances with other forms of payments. For example, an employer may allow employees to use an allowance to buy certain types of items, but for other items, they have to pay out of their own pockets. They may also specify that they need a supervisor’s approval to spend allowance money, and if they can’t get that approval, they must pay out of pocket.

For more information on employee allowances and other ecommerce solutions and strategies to enhance your B2B ecommerce site, take a look at our B2BProgramManager today.

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Topics: B2B Group Purchasing

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