Reimbursement

The reimbursement meaning is simple – it refers to the compensation offered by a company or organisation to cover out-of-pocket expenses incurred by an employee or extra payments made by customers or other parties. In short, reimbursement is the money that you get back for a previous transaction that you spent on your behalf or a third party’s behalf.

This reimbursement example can help clarify the concept: Say you are an employee of a company that visited Tokyo to seal a deal on behalf of the company. You pay for the cost of this trip from your pocket. However, the company will pay for all the expenses you incurred upon your return, which is known as reimbursement.