As business trips are on the verge of a comeback, the topics of buying plane tickets, renting cars or booking hotels are getting relevant again. So, the real question is: can businesses use virtual cards to accommodate their business travel needs?
There has been a notable increase in the use of virtual cards in the past few months. Online spend, subscriptions and the need for managing remote teams grew significantly in the complex business environment caused by the COVID-19 situation. But now that things are slowly getting back to normal and European borders are opening, how can one utilise and adapt these tools to the standard business practice?
For the past several weeks we have been shedding light on the concept of virtual cards and what benefits they bring to the table. In case you have missed our webinar on the topic, we had it thoroughly explained by Clive Cornelius, Head of Travel Segment Visa Europe. Additionally, you can read our blog on what is important when choosing a virtual card.
In short, virtual cards have the exact same features as standard physical cards, but without the plastic equivalent. Virtual cards are issued by the major card networks such as VISA and Mastercard and in recent years gained significant popularity due to the rise of neobanks and fintech companies.
Virtual cards offer many value-added features such as better control and security, automated reconciliation, improved budget tracking, real-time spending data and card sharing prevention, just to name a few. This is all very nice and undoubtedly useful, but can we use these virtual cards when things get back to normal? More particularly, how can we use these cards when we start traveling again?
As business trips are on the verge of a comeback, the topics of buying plane tickets, renting cars, and booking hotels are getting relevant again. So, the real question is: can businesses use virtual cards to accommodate their business travel needs?
In a word, YES. Yet, there are several very important aspects that one must consider.
Here are the top six key reasons why your business needs an efficient travel expense management system in place:
Conventional business travel management can create big challenges. Traditional expense policies are inflexible, outdated, and rarely integrated with the most essential tools.
Unfortunately, many companies still require business travelers to manually input information into separate systems before booking flights, hotels, and other expenses. This process is time-consuming and prone to human error. Also, relying on manual receipt submission for reimbursement (think paper receipts, scans, and emails, etc.) can often lead to payment delays.
Finance teams also face difficulties reviewing expense requests and sending them back to employees for corrections or missing information. The scattered nature of these requests across multiple systems, like email inboxes, spreadsheets, and calendars, makes tracking and managing them impossible.
At Payhawk, we introduced the per diems feature to help address the issues outlined above. Per diems are relatively simple, and they involve establishing a standard daily rate for reimbursement, eliminating the need to track individual trip spend.
Per diems can cover all reasonable costs related to a business trip, including meals and incidental expenses like laundry or dry cleaning. And the amount employees receive as a per diem depends on their location and travel duration. The per diem allowance also varies among companies and countries. For example, in Germany, per diem allowances are calculated according to the provisions outlined in the German Income Tax Act.
Using per diems offers several benefits, including improved compliance and reduced administrative burden associated with company travel expense policies. Using per diems also lets your companies track tax-deductible expenses efficiently, making it easier for companies to reclaim VAT.
Implementing a per diem policy is often an excellent alternative to reimbursing employees for individual expenses incurred during business trips. Instead of claiming reimbursement for each meal, employees receive a per diem that covers their dining expenses, simplifying the process considerably.
From being Payhawk’s first Sales person to steering our commercial strategies in Europe and beyond, Andrey brings a wealth of experience and is an integral part of Payhawk’s commercial success. Beyond the hustle, you’ll find him embracing the thrill of tennis and snowboarding or spending quality time with his two children. And if you need a living encyclopedia on football and music history, Andrey’s your guy.