Going on an overseas business trip often means encountering several expenses related to transportation, meals, lodging, etc. While domestic business trips might already feel familiar, managing expenses abroad can be more complicated.
While you may be traveling abroad for work, it’s essential to remember that not all expenses will be covered. If the expense is deemed unnecessary or unrelated to the business purpose of the trip, you may not be able to claim reimbursement for it.
Understanding how to handle these expenses properly is essential to ensuring that you adhere to company policies and avoid unnecessary costs.
Whether you’re preparing for an international work trip or reflecting on one, here’s a guide on how to manage overseas business trip expenses.
Know What Expenses Count as Business Travel
Generally, business travel expenses are costs incurred by you as an employee to achieve work goals while on a business trip.
You are representing your employer. During this trip, you have to pay for meals, transportation, and accommodation. These are generally considered work-related travel expenses. These expenses are either incurred by your employer either by paying for them at the time of reservation or by reimbursing them later.
However, your company may not cover the cost of the drink you have at the hotel bar. Similarly, spending money on activities unrelated to your work, such as tourism or visiting non-work-related places, may not be reimbursed. It’s important to keep the focus on work-related activities and avoid spending outside of what’s deemed appropriate for business purposes.
Therefore, you should be aware of all the inclusions and exclusions of the expenses your employer will pay for. The next point will explain this.
Learn About Your Company’s Travel Expense Policy
Take time to go through your company’s travel expense policy. This policy outlines what will your company pay for and which kind of travel expenses are likely to get reimbursed. Moreover, look for the details regarding the type of bookings as well as what you need to provide your employer after returning from the business trip.
For instance, the policy will help you understand if you can book your accommodation at a luxurious hotel or not.
Read the policy carefully and reach out to the concerned person in case of any confusion or doubt.
Record business-related expenses
Make sure to keep track of the expenses you make on your trip abroad. Note down all the details of each payment, including who, what, where, when and why.
Maybe you have a dinner with a client, note down the client's name, the restaurant, the number of people, not to mention the date and time, and other relevant details. This way, you can easily remember the details of the expense and accurately complete your travel expense report when you return.
Additionally, be sure to save all receipts from your purchases during the trip to ensure your reimbursement report is correct. Or you can travel expense management apps.
You can refer to the below-given format below to prepare your business travel expense report.
Keep Your Personal and Business Expenses Separate
This might sound obvious, but it can get confusing, especially when you are on a business trip abroad. Before using your card, you should know which expenses are personal and which are business-related.
For example, if you're visiting a tourist spot during your free time, you can't charge that to your employer. But if you're having a meal with a client, you can ask your company to reimburse you.
Keep Important Documents and Receipt
To ensure that your overseas expenses are reimbursed, you must have the proper documentation. These documents will serve as proof that your expenses were necessary for business purposes. The basic supporting documents you should gather include:
Airfare: Keep the airline ticket and receipt for the flight you took to and from the destination.
Local Accommodation: Save the hotel receipt or card payment receipt for your stay abroad.
Local Food Expenses: Retain receipts from local restaurants or card receipts to prove meal expenses.
Travel Agency Commission: If you used a travel agency, ensure you have proof of any commission paid to them.
Visa Issuance Fee: Make sure to keep the receipt for any visa application fees you paid.
Having these documents in order will make it easier to submit a travel expense report and ensure a smooth reimbursement process.
Understand Business Trip vs. Overseas Entertainment
It’s also important to understand the difference between general business trip expenses and entertainment expenses when traveling abroad. Overseas entertainment expenses fall under the category of entertainment and are often subject to specific tax laws. These expenses might include business dinners, client meetings, or other activities that involve entertainment. However, these expenses must still be related to the business trip and adhere to any company policies and tax guidelines.
In most cases, entertainment expenses are considered deductible or necessary under tax law, but it’s crucial to keep detailed records and receipts for any such costs to avoid confusion during reimbursement.
Conclusion
Handling overseas business trip expenses requires careful planning and organization.
Remember to focus on work-related activities and refer to your company’s travel policy to stay within the guidelines for what’s considered acceptable.
With the right approach, you can manage your business trip expenses efficiently and make your international work travel experience more organized and hassle-free.
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