Are you a business that provides Per Diem allowances for your traveling employees? Most companies that want to avoid the long route of collating, validating and approving business expenses, opt for Per Diems.
In such cases, you might not need an expense report form that contains all the details of your employee travel expenses. But you would still need an expense report form to document and map your Per Diem allowances. In this article, we talk about the mandatory fields that your expense report form or template must-have to adequately document Per Diem allowances at your organization.
What are Per Diem allowances?
Some businesses provide their employees with daily allowances when on a business trip. This helps employees to not use their money for business expenses. These daily allowances are known as Per Diems. Per Diems help cover the living expenses of your employee while on a business trip.
In such instances, employees do not have to provide explanations for all their business expenses. The company sets a Per Diem rate, which is the daily allowance given to a traveling employee for a single day. Here, businesses use an expense report form to document and map Per Diem allowances to specific employees.
Criteria for setting Per Diem rates in an expense report form:
- An employee who needs to take care of their accommodation: Sometimes, your employees may stay over with family or have other such arrangements. In these cases, companies provide a fixed Per Diem rate to cover their accommodation, dining, and other miscellaneous expenses.
- An employee whose accommodation is taken care of by the company: In these cases, the employee would not have to spend on their lodging. Hence, the Per Diem allotted to such employees will be lesser. Here, the Per Diem will only cover dining and other miscellaneous expenses.
Mandatory fields in an expense report form to track Per Diems
In a study by Levvel LLC, 22% of businesses use a combination of spreadsheets and scanned receipts as a way to maintain records of business expenses. If you fall under this category, here are some of the mandatory fields your expense report form must-have to keep track of your business Per Diem allowances.
- Employee details: These details are vital as they help match an expense report form to a specific employee.
- Expense type: Mentioning the type of allowance helps finance teams understand the spending patterns of their employees.
- Designation: The designation helps understand the allowance bracket that the particular employee falls under. This is known as the allowable expense limit. Mentioning this as a mandatory field can help finance teams mitigate any policy violations.
- Per Diem limit: The per diem allowance limit is based on a variety of factors. These details play a crucial role in ensuring no leaks are present in the system.
- Dates of travel: Since per diem allowances are daily allowances, this is a mandatory field that needs to be filled in by your employees. This field provides insight into the number of days of travel, and the corresponding expense claims fyled in the expense report form.
- Nature of business purpose: This is a vital field to mention in the expense report form. Details such as these help businesses stay audit-ready at all times.
- Comments: Adding this section allows your employees the opportunity to justify or explain specific expense claims. Additionally, it also allows businesses the chance to document all explanations under one document.
How is Per Diems in an expense report form reimbursed?
Per Diem allowances can be either given to the employee before or after the business trip. Employees need to submit their expense report form within 60 days of using the allowance. Here, unlike in a traditional expense report form, they do not need to provide explanations for any of the business expenses.
In an expense report form that documents Per Diem allowances, businesses need to focus on documenting the intent behind the expenditure. The intent may mostly fall under client meetings or business events and conferences. Usually, companies allow their employees to retain unused money.
Should businesses use an expense report form?
Even though an expense report form may address particular pressing challenges on the surface, it costs you more than you can imagine. Your employees and finance teams spend hours on this process. Billable hours wasted on something that could have just been automated.
Additionally, businesses also function with little to no insight into spending trends, spending patterns, policy violations, and more. This could severely affect the health of your business.
Businesses of today are always looking to automate and forget about the mundane tasks. An automated expense management software like Fyle provides your employees enough time to focus on what truly matters - the growth and scale of your business.
Schedule a demo to understand how Fyle can help streamline your expense management.