Managing expenses and per diems are among the biggest hassles involved with business travel. Traditionally, it involves employees manually submitting expense requests, filling in spreadsheets, and waiting several days, or even weeks, to be reimbursed.
The per diem feature in Payhawk's spend management solution seamlessly solves an otherwise lengthy reimbursement problem. How? by calculating the per diem and automating the reimbursement process.
Many companies find managing travel expenses complicated, but it doesn't have to be. With the right expense management software and systems in place companies can ensure their employees have access to the funds they need for business travel expenses, while still supporting spend policy and keeping control of costs.
By reducing unnecessary spending, companies can save money on their travel expenses, especially if they have a lot of frequent travellers. Using software with per diems (and built-in limits and approval workflows) can avoid confusion and result in significant savings over time.
Travel expense reports are often filled out incorrectly and can be very time consuming. Inaccuracies and poor user experience can lead to higher costs for companies because they have to spend extra time reviewing the reports and making corrections before they can reimburse. When employees know that they are being reimbursed accurately and in a timely manner (thanks to some speedy automation) they feel more confident about spending as they need, and less stressed about time-consuming post-trip processes. This improved employee user experience can result in increased productivity and loyalty in the long run.
One of the main issues with traditional travel expense policies is that they are very rigid, sometimes outdated, and often not correctly integrated with other necessary tools.
Unfortunately, there are a lot of companies where business travellers still have to manually enter information into separate systems before booking flights, hotels, and other expenses. In practice, manual entry is time-consuming and prone to human error. And when employees are required to submit receipts for reimbursement by paper, email, or fax – this means delays in getting paid.
In addition, finance teams have to review each expense request and send it back to employees when information is incorrect or missing. Finance teams also have a hard time tracking requests since they’re spread across multiple systems, such as email inboxes, spreadsheets, and calendars (as opposed to one platform with all the info in one place).
At Payhawk, we introduced our per diems feature to solve the problem of disconnected travel expenses.
Per diem is a Latin term meaning "for each day." In business, it refers to the process of reimbursing daily expenses to travelling employees.
Per diems can eliminate the need for tedious expense reports by introducing a designated standard daily rate without having to refer to the actual expenditure.
The amount of money that an employee receives as a per diem varies depending on where they live and how many days they will be away from home. The allowance included in a per diem varies from company to company and also from country to country. In places like Germany, a typical per diem allowance is calculated in accordance with the provisions of the German Income Tax Act.
Per diem allowances can include all reasonable costs associated with a trip, like meals, plus lodging incidentals like laundry service or dry cleaning.
Why use per diems? For a start, they are a great way to improve compliance and reduce the admin involved with your company travel expense policy. Plus, you can easily track tax deductible expenses in order to claim back VAT.
In many cases, a per diem policy can be a great alternative to paying employees for all each and every business trip expense. If an employee travels and needs to eat, for example, he or she should receive a per diem instead of claiming per-expense for each meal. Simple.
You don't need to keep track of employees' meal costs or go through the hassle of tax reporting on each expense.
They don't have to deal with receipts and accounting paperwork when they get back from their trip.
Our per diem feature allows employees to submit requests with one click (no more manual submissions), while also providing admins with insights into how the money is spent.
The process is simple: the finance team can define custom per diem rates, then employees can create a per diem expense by entering a few trip details such as destination(s), date, and time. The employee has to also identify any free meals they had during the trip (if meals were free, deductions will be applied for the per diem). Then, Payhawk will calculate the exact (per diem) amount that they should be reimbursed.
Once approved by the manager — following whatever approval flow the customer sets — the money is deposited directly into the employee's bank account.
For example, if your employee, Maisie visits a new city and submits a per diem request through the app or portal, then their part of the process is essentially complete. During the trip Maisie doesn’t have to gather all of her meal receipts or even collect any additional expenses included in the per diem allowance. Once the manager approves the per diem request then the employees receive the funds in their personal bank account, hassle free.
Many companies have trouble with their current expense reimbursement process because they don't have an easy way for employees to submit expenses or they don’t make it easy enough for accounting staff to approve them quickly enough. Our automated system eliminates this problem. Your accounting team doesn’t have to manually handle travel reimbursements since everything is automated behind the scenes with Payhawk.
With our automated, customisable approval workflows, you don't have to approve each request individually anymore. When an employee submits a request under a certain limit, Payhawk automatically approves the expense.
The new per diem feature gives you all the tools needed to manage your per diem allowances. You can customise per diem rates in accordance with your expense policy, and you can also set up approval workflows aligned with your company structure. Managers can also view spend and get in-depth analysis about employee spending habits, so they can better plan future travel budgets or make any necessary adjustments.
Payhawk's convenient interface allows employees to submit their receipts and confirm that they've been reimbursed, which means your business no longer has to deal with paper receipts and manual reimbursements. We also made sure that the reimbursement request process is easy and transparent for both employees and finance teams. The employees don't need to fill out any forms or ask anyone for help. They can simply submit their request using the platform or app and then track its progress in real time.
Managers and finance teams will also be able to track requests in real time, see who submitted them and approve or reject them right away if needed. They'll also be able to determine exactly who was travelling at what time so they can fully understand whether or not they should receive reimbursement for their expenses (for example, if they went to several client meetings that extended outside of office hours).
Paying for work-related travel doesn’t have to be complex.
Traditionally, it business travel involved manually submitting requests and waiting for approvals to receive reimbursement. Payhawk's per diem feature solves this time-draining problem by automating the reimbursement process and tracking travel expenses in a simple way.
Overall, per diems are a great way to keep track of your travel expenses. They are also useful for tax and cost-controlling purposes.
Our customers use Payhawk to manage all types of travel: business travel, corporate events, industry conferences, and more. Payhawk takes the hassle out of managing your company's travel expenses so you can focus on growing your business.
Travelling for work? Learn more about how Payhawk can help you manage your travel expenses in one place, from per diems to tracking mileage and travel reimbursements. Book a demo today.
Whether you have tens, hundreds, or thousands of employees, we’re making your business spend work for you, giving you control over spending at scale with a single solution. Say goodbye to tedious finance tasks, schedule a demo with us today.