How to keep track of business expenses when travelling
When it comes to tracking expenses on business trips, one of the most common complaints from travellers is the difficulty of keeping track of every receipt when out of town on business. It's quite likely that during your travels you probably didn't think about saving all those travel expense receipts and many of them will end up being lost in the abyss that is your purse or wallet. If you are a frequent business traveller, keeping on top of these things will really help when your expense report is due.
Though it can be a bit of a pain, keeping hold of those receipts and proofs of purchase goes a long way in helping your accountants or tax advisors begin the most important part of the year: tax season!
Where do the receipts end up during a business trip?
One of the great things about a credit card is printing out an itemized sheet for all out-of-town purchases with a business credit card. If it wasn't a business transaction, no worries, just cross it out. If it was used for business purposes while out on a business trip, it's considered proof-of-purchase for travel expenses. When it's time to account for those expenses during tax preparation meetings, these can be turned in. Don't forget they could receive compensation for some of the gas mileage they get when they have to buy fuel to get to their destinations.
For most employees, partners, co-owners, owners and staff, one thing about tax season is that they can get reimbursed when everything is completed correctly. This is ultimately true for those who are considered independent contractors; for instance, freelance designers, writers or those who are sole-proprietors of a company are able to get this tax credit upon turning in an expense report.
Keep track by filing
Staying organized is just as important when travellers are the business owner and have to go away on business. Writing up an expense report should be done on a monthly basis to keep track of all travel expenses. This will ultimately help them by the end of the year come time for tax season.
When travelling for business, it's important to keep all the expenses in orderly fashion to receive proper reimbursements for business spending. Staying on top of all business expenses when travelling may be followed by a few basic rules.
Email file (folder)
To be extra organised, you could make an email file labelled: "Business Trip: Dallas Contract," and "Trip files for business purposes."
This email file folder should have everything that has to do with your business plus travelling expense, combined. Some of those documents will have the dates, the places, the reason for the business venture and the costs. Additionally, this is a good place to store the confirmation emails for items such as:
Hotel information, dates and rates
- Airline information, dates and rates
- Car rental information, dates and rates
- MapQuest information, appointments and gas mileage
When you need to report your expenses for the year, all the necessary emails will be stored in one place. It's also a good idea to have any print-outs as "proof of purchases" stapled with the receipts.
This travel data information is normally recorded and verified. Emails are good as "backup records for original receipts" (although they don't count as "original receipts" otherwise anyone can email themselves these from scratch.)
Travel file (folder)
Buy a box of envelopes and use these for "hard copy" files, labelling them with the following: Date, Place, and Business Trip Purpose.
E.g : January 27, 2018 Dallas, Texas "City Bridge Contract"
This is a great way of organising hard-copies of your expenses. For the sake of staying organised, put any receipt received during the trip, into one of these labeled envelopes. If you eat out at a restaurant, obtain that receipt from dinner and stick it in the envelope. If it's at a hotel restaurant, it may be on the hotel voucher. Either way, they all go into the envelope made for that specific trip.
Have a special place for these files, perhaps in a dedicated spot in your briefcase or travel bag. Remembering where they are will become habitual. Be sure to take care of the original receipts for things that do not have a digital footprint, as these are of course not replaceable.
By the end of the year, gather all these envelopes and "backup" printouts start using them for the business expense reports. Other spots that these printouts and receipts can be kept in are boxes and bowls.
They'll have to make time to "tidy up" loose ends once a week. It's really going to be a visual reminder. Travellers can even make a "digital receipt file" so they can take a picture of these receipts when they're on the go. Taking it with a mobile and emailing it to themselves is more convenient for a digital backup.
Tracking when travelling
The receipts which are the easiest to track when out of town on business are the hotel, restaurants, and air-fare ticket receipts.
Other travel expenses which are trackable are original receipts from retail stores (i.e. hygiene, food, coffee...), coffee shops, taxi cab rides, parking garages or valet parking is tax-deductible as well. This goes for "non-receipt items" like tips for instance.
Track car miles
A good idea for tracking car miles when on a business trip is to take a picture of the receipt and send this to yourself or your secretary via email. This way, car mileage reimbursements are easier to receive. An expense report with the receipts or proof-of-purchase have much more merit than without. What helps is an "official log book" which is specially created or formatted for mileage and fuel entries. Travellers can get these online or the office depot store.
Most fuel logs are kept in the following areas of a vehicle.
- car door pockets
- glove compartments
- consoles of vehicles
The information entered in a log book are dates, places of travel, city, and purpose of the travel. Most important is to log the "round trip mileage" which is the total gas and mileage (from the odometer).
Keep track with apps
Some of the apps that keep track for expenses for business can be more effort to figure out and use than it's worth. In fact, when travellers have to use an app, it may take a while to learn how to use it, so you'll need to be patient and remember not to rush into things when purchasing something. In fact, beware of such apps and read everything such as the reviews before starting any type of new program or software, especially when it has to do with finances. Here are some good travel expense applications that you can download to help ease things for when travelling on business.
- Concur Mobile
- Smart Receipts
When you have all your receipts nicely itemized and ready for the accountant to put into order, you should be on your way for a great tax-deductible during tax season.
If you found the tips and insights into under-18's travel insurance useful, then check out our other helpful articles on travelling as an under-18.
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