Hi Friend,
I need your urgent help on this:
We are an IT company and our Client is asking our employees to visit their offices in India as part of Project requirement. As client is paying for Flight and Accommodation, for other expenses like food, cab and daily travel, we are giving advance cash to Employees which they are using during their travel and providing us the bills.
What do you think, we should give them advance and follow the same process, or they can expense and reimburse from us. Please suggest.
Is there any policy.

From India, Pune
Dinesh Divekar

Business Mentor, Consultant and Trainer
Dear Deepti,

Whether employees spend on their own and later ask for reimbursement or they take advance and then submit the bills, the larger issue is having a policy that creates slabs of the permissible expenditure. Any expenditure employees will have to borne on their own. Therefore, first create policy that defines a permissible limit of expenditure depending on the employee's designation/rank, . While defining the policy, include the following additional points:

a) What would be the process of the submission of the claims i.e. how it is to be routed

b) Turnaround time for the accounts department for the settlement of the claims.

c) If the advance is taken then within how many days on completion of the travel, they need to submit the bills. Will accounts department allot any reference number for the advance for the easy settlement?

d) What will happen if it is discovered that fake bills are submitted or bills are padded. What will be the process of the enquiry? What could be the maximum punishment?

e) What will happen if the employees link their Earned Leave to their outstation visit. How to demarcate line that divides their personal and official expenditure?

f) What will happen if the near and dear ones also travel along with the employee? How to demarcate employee's expenditure and their family's expenditure?

Hope the above points are sufficient.


Dinesh Divekar

From India, Bangalore

Workplace Assessment and Training
Travel policy is one of the major headaches for many companies.

Most people are generally honest, but there are always a few bad apples who will find ways to rort the system.

Many companies have found that having a set per diem allowance for employees to cover accommodation, meals, incidentals such as dry cleaning, taxis, etc. Usually the company will organise and pay for the travel, eg flights, trains, etc. With this system, the employee has to book his own hotel/accommodation etc. They are responsible for making their allowance stretch to cover the costs.

As various cities and towns have differing accommodation costs, the allowance has to take account of this so, for example, Delhi hotels will be more expensive than those in a small town. So you might have a higher per diem for employees who need to go to Delhi, Mumbai etc. Same with meals, food may cost more in bigger cities.

Now you can probably see the flaw in this system. Give an employee x rupees for his trip. If he is smart enough, he will find a hotel for y rupees, eat street food, and generally find cheap ways to get around. In the end he may be able save some of the money he was given. I know this because I have done it.

However, some employers find this is easier than trying to get employees to bring back receipts and account for their expenses, particularly those who overspend without regard for the company's money.

As Dinesh has said, whatever you do, YOU MUST cover all the bases, and make the policy as comprehensive as possible. Once you formulate the policy, you then run a training session to make sure everyone who needs to travel, understands the policy to the letter. They also need to know that transgressions will be dealt with severely. You must have penalties in place, and strictly enforce them, to warn others.

From Australia, Melbourne
This discussion thread is old and is closed for new comments. If you want to continue this discussion or have a follow up question, please post a new thread. Add the url of this thread if you want to cite this discussion.

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2021 Cite.Co™