May 2023 Client Profile

The Sunbelt Company is revising its travel policy for employees who must travel for company business. Management is considering whether to adopt a per diem policy or stick with their current one, which covers employees’ actual expenses. Why should we change to a per diem policy?

Per diem expense policies provide employees with a fixed daily rate to cover most travel expenses. These types of policies allow for easier recordkeeping and budgeting. It lets employees avoid collecting stacks of receipts and eliminates variability in trip expenses. As long as your company policy conforms to the IRS per diem rules, your traveling employees won’t have to provide a record of every meal they purchased.

Alternatively, companies can offer a hybrid approach, using a per diem rate for typical travel. Perhaps when an employee is traveling to a high-cost location or meeting with a valuable customer or supplier, you could allow employees to charge their actual expenses.

Client Profile is based on a hypothetical situation. The solutions discussed may or may not be appropriate for you.