Managing Global expenses
With the pace of Globalisation and the trend for business travel spend to continue in 2018, business travel expenses represent one of the largest single outgoings for organisations. But managing expenses across multiple countries is complex, differing VAT rules, per diems and mileage allowances and then differing rules around how each of these are allocated and managed, can cause additional hidden costs and workload for finance teams.
The fiscal management of expense claims are fairly straight forward when your organization is based in one country as you only have to follow a single set of rules and regulations. Once your organization expands to become multinational, the complexities around expense management increase as each different countries rules and regulations for per diems, mileage rates, benefits in kinds etc. have to be taken into account.
For example, there are inconsistent calculation rules to determine a day of travel, in Germany, they take a calendar day to calculate the daily allowances, in Denmark they take a 24 hours period to calculate daily allowances (disregarding the calendar date), and in Poland its different again, as rules are applied depending on the nature of the business trip, for example whether they are land trips, air trips or sea trips. It can be confusing!
Germany is probably one of the more complex countries as they have introduced extra tax regulations on expenses. For examples some meals are considered as a ‘benefits in kind’ and are therefore taxable against the employees’ salary, making the recording and tracking of these expenses vital. Germany also has a three-month strict rule whereby if the business trip is longer than a three-month period then the full allowance given to the employee is taxable.
In Finland, they have intricate mileage rules with different rates for cars depending on what the drivers carry in the car, and several additional vehicle types such as Motorboat, snowbike, quadbike, motorcycle, moped and other means of transport! As an example, the mileage rate for a passenger car is 41 cents, increased to 44 cents if the employees job requires them to transport a dog in the car!
The Traveldoo expense management system can help reduce the hidden costs ensuring an efficient management of the accounting and expense process. Traveldoo has built all the logic around these rules and regulations into the Traveldoo expense management system, enabling customers to benefit from a truly automated global expense solution following county-specific best practice protocol for expense management.
Please speak to your account manager to find out how we can help you.
*Per Diem – a specific amount of money an organization gives an individual, often an employee, per day to cover living expenses when traveling for work.