Five tips for managing overseas business travel expenses
How do you keep control of employee travel expenses when subsistence costs are incurred thousands of miles away in an overseas country? Well... it's one of the toughest challenges faced by expense managers.
Along with all the normal problems you'd expect, there are the added complications caused by distance, different currencies and legal systems. Without a robust system, costs - such as a few extra drinks at the hotel bar, or a "small" upgrade to a business class ticket - can get out of control.
Expense fraud is a particular issue with dishonest employees able to exploit management inefficiencies. With it often taking weeks before travel expenses are processed, fabricated and exaggerated travel costs can easily go undetected.
Digital technology is a powerful ally to overcome challenges and provide more effective ways to streamline and manage overseas expenses.
Take a look at our top five ways to improve management of foreign business travel expenses, from subsistence and accommodation to tax and currency conversion.
Demystifying tax and HMRC overseas subsistence rates
Trying to figure out the expense rate tax rules for different countries is a daunting prospect. The HMRC subsistence rates for overseas business travel explains exactly how much you can reimburse your employees, depending on the country they have travelled to. Reviewing these rates can help you set out spending guidance when putting your travel policy together.
Avoiding this process means that many companies are missing out on international expense costs that can be legitimately reclaimed. Recovering these costs is made a whole lot easier when a digital management system is being used.
Expense management software provides easy access to the accurate data that’s required by the tax authorities, making reporting employee expenses to HMRC more straightforward. Systems can also allow expense information to be easily shared with agencies that specialise in overseas VAT reclamation. Additionally, your company will also have the option of recovering costs while avoiding the complexities of international tax laws. Nobody wants to get wrapped up in those!
Have an overseas travel policy in place
A surprising number of businesses don’t have an expense policy that covers overseas travel. This tends to be the case with smaller businesses where foreign travel is likely to be the exception rather than the norm.
An effective expense policy should cover both domestic and international travel expenses. It needs to create clear guidelines on how much can be spent, exactly what can be claimed and the processes for doing so. Ensure the policy is fair, accurate, and accessible to cover transport, accommodation and subsistence.
A cloud-based management system like Webexpenses allows policy reminders to be delivered in real-time via on-screen notifications. Our system can also automatically alert a finance team whenever an expense claim breaches the set limits.
Plan international business travel in advance
The more business travel arrangements can be planned ahead, the lower costs are liable to be. Research suggests that booking business travel at least 21 days in advance significantly lowers cost than if it had been arranged three days before. That's a lot of savings!
The cost advantages of planning ahead apply to all of the main expenses relating to business travel: flights, hotels, and any public transport. So allowing employees to leave travel bookings until the last minute can significantly bump up costs.
While this needs to be managed, the additional costs need to be balanced against the advantages delivered by a flexible and agile approach to travelling overseas.
Control currency conversion
Dealing with constantly fluctuating exchange rates can be particularly challenging when handling overseas expenses. When currency conversions are being done manually, it makes the processing of reports a slow and error-prone task for finance teams.
Managing exchange rates is one headache that can be effectively removed with digital expense management software. Webexpenses is able to automate the handling of multiple currencies.
Accurate currency conversions are done based on the exchange rate at the time that the cost was incurred. This process creates a simple and fuss-free way to manage the troublesome areas of international business travel and expense management.
Use an expense management app
Smartphones have become an essential tool for business travellers. Instant handheld access has transformed the way employees are able to manage and record their expenses while on overseas trips.
Employees travelling overseas no longer need to worry about keeping paper receipts safe in a folder. Expense management apps like Webexpenses uses OCR technology to scan all paper receipts and convert into a digital report in less than 20 seconds.
This streamlined process means accounts can be updated as and when costs are incurred. It removes the dreaded and painful post-trip task of having to manually process a bundle of foreign receipts.
Take control of international travel expenses
Make managing overseas travel expenses simple with an automated system. Webexpenses can help you break through the complexities of subsistence rates, currency conversion, and receipt management. Get in touch or request a demo to see how we can help you keep track of your employee business travel spending.