Employees who travel for business purposes are paid travel allowances by their companies. There are different types of travel pay through which a company pays the allowance to their employees. This depends from company to company if they pay your travel allowance in advance, reimburse it later, or choose to give fixed day-to-day expenses.
This day-to-day expense is known as per diem, which means a fixed daily allowance given to employees to cover their expenses while away from their usual place of work. Effective management of per diem can help you stay within your budget and streamline your expenses.
In this blog post, we’ll discuss five valuable tips to help you manage per diem travel pay and expenses efficiently.
5 Tips to Manage Per Diem Travel Pay:
1. Understand Your Company’s Per Diem Policy:
The first step in effectively managing per diem travel pay is to understand your company’s policy regarding per diem rates and guidelines. Companies often have specific rules about the maximum per diem amount allowed per day and the expenses it should cover, such as meals, lodging, and incidentals. Make sure you are aware of these rules to avoid any discrepancies or misunderstandings during your trip.
2. Keep Detailed Records:
Maintaining accurate records of your expenses is crucial when managing per diem travel pay. Use a dedicated travel expense tracking system or app to record each expense, including receipts whenever possible. Categorize expenses by meal, lodging, transportation, and incidentals. This not only helps you stay within your per diem allowance but also simplifies the process of reimbursing expenses when you return.
3. Plan Your Meals Wisely:
One of the significant components of per diem is meal expenses. To make the most of your per diem allowance, plan your meals wisely. Research the cost of dining options in the area you’re visiting and choose restaurants or eateries that align with your budget. Be mindful of the per diem meal rate set by your company, and try to stay within that limit to avoid overspending.
4. Use Company-Provided Services and Discounts:
Many companies offer special discounts or partnerships with hotels, airlines, and car rental companies for their employees on business trips. Take advantage of these benefits to reduce your travel expenses. Booking through company-approved channels can often result in cost savings, which means you’ll have more room within your per diem allowance for other expenses.
5. Be Frugal with Incidental Expenses:
Incidental expenses can add up quickly and eat into your per diem allowance. These expenses typically include tips, transportation to and from work-related activities, and small personal items. To manage these costs effectively, set a daily budget for incidentals and stick to it. Consider using public transportation or ride-sharing services instead of expensive taxis, and be mindful of unnecessary spending on personal items.
Final words:
Managing per diem travel pay and expenses is essential to ensure your business trips are cost-effective and hassle-free. By understanding your company’s policies, keeping detailed records, planning your meals wisely, utilizing company-provided services, and being frugal with incidental expenses, you can maximize your per diem allowance and minimize out-of-pocket expenses. Effective management of per diem not only benefits you but also helps your company maintain a structured and cost-efficient travel program.
