One major difference between business travel and leisure travel is that business travel is covered by your company. And that means you have to complete an expense report. Although expense reports are valuable, most business travelers hate them. Still, they are generally the only way for you to be reimbursed for any expenses that you might have incurred. Here’s a guide to travel expenses for business.
Types of Expenses
The common expense categories eligible for reimbursement are:
- Travel Expenses: This category is the most common one on your expense report and is usually one of the broadest in scope. Travel includes transportation (airfare, train and even mileage reimbursement for your personal car), accommodations and meals. In the U.S., mileage reimbursement is typically based on the IRS rate, which is $0.575 per mile for 2015 (it’s updated each year). Tolls and tips for hotel staff can usually also be expensed. All travel expenses will likely be reimbursed by your company, but learn your company’s travel policy in case you need to use preferred travel suppliers.
- Entertainment: In business, it is often required to entertain customers. This could include meals or taking customers to sporting events or other activities. When traveling for business, many companies may also allow employees a modest personal entertainment stipend to see a movie or visit a museum.
- Office Supplies: An employee may need to purchase reimbursable office supplies or home office equipment for regular daily use. It may also be necessary to purchase supplies, equipment or photocopies while traveling.
- Professional Memberships and Dues: Memberships in professional organizations or dues are usually reimbursable and have their own category on the expense report.
- Telecommunications: Mobile telephone, home office phone and Internet access are usually reimbursable. In many companies, a mobile phone is assigned, but in others, you contract for your mobile and then get reimbursed.
- Subscriptions: Many companies will reimburse the cost of subscriptions to professional journals and magazines if used in the course of your job.
For most expenses, the company will require an original receipt showing the final amount paid, such as the after-tip amount in a restaurant or a zero-balance on a hotel bill. If you misplace your receipt, consult your travel policy. In some instances, a credit card bill might suffice, but other companies may require you to get a replacement receipt. It is worth noting that most companies have a policy that requires receipts for any expense over a certain amount—often $25 or $50. If in doubt, save your receipt and submit it anyway.
The Importance of Accounting for Your Expenses
While expense reports can be a hassle, they’re extremely important. Your company needs timely submission of expense reports so they can close their books for the financial period, such as closing the quarter or the year. Certain expenses like client-related travel may also be paid for by the client. Therefore, it’s critical that your company charge back the client in a timely fashion.
Completing Your Expense Report
Most companies employ expense management software, such as Concur, to track, categorize and process expenses. Often, your online travel portal, your corporate credit card account and your expense management software are tied directly together, making it seamless to capture all of your travel in the expense report. However, the difference between expense reports being a headache or a piece of cake is knowing your expense management software completely.
Of course, smaller companies may not be able to afford sophisticated expense management software and you may be asked to submit expenses on what is essentially an online Excel form. Whatever system your company uses, the purpose is the same: capture expenses and ensure they’re paid.
The Top 5 Tips for Travel Expenses
- Know and follow your company’s policies.
- Keep notes during your travels about where you spent money, even if your company’s expense management system automates this process. It can be helpful to have your own notes that are not saved in an online tool, particularly if your company’s systems are prone to crashing.
- Save receipts for everything, even if they aren’t required. Even better, you can make digital copies of your receipts with many software tools, such as ExpenseIt from Concur. However, be sure to save the original receipts from international travel as your employer may need them to secure a VAT refund (digital scans will not be sufficient).
- Don’t overlook the small change. Things like tips to hotel staff, tolls, and mileage add up. Since these are not credit card charges, they’re coming out of your pocket. Don’t lose out on getting reimbursed for everything you’re entitled to.
- Submit your expense reports on time. It helps your company keep their books in order, and if you’re using your own cash, you want it back!
Travel expenses don’t have to be complicated. If you learn your company’s policies and software and don’t fall behind, expense reports can be a simple part of the job.