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What is the best management model for per day and mileage allowances?

Carol Bernard

The models that companies put into place to manage expenses related to corporate travel vary depending on the organization’s culture, sector and characteristics. Find out which model best suits your company’s interests.

Each company has to choose the model that best adapts to their own and their employee’s interests. There are three key models for managing this kind of expenses:

What is the best management model for your company’s per day and mileage allowances?- Fixed model. In this case, the company sets an amount for one expense or a set of them. By doing so, the company relinquishes precise control of expenses in order to facilitate the tasks related to the revision and validation of travel expenses. Allowances become a maximum assignment to which an employee can have access to cover business expenses.

- Per expense model. In this case, each expense must be verified with a receipt and/or invoice. As such, the company has greater visibility in terms of the exact amount of expenses, which can be reimbursed exactly, but the tasks involved in revision become far more complicated, as it requires the management of all of this extra material used for verification.

- Mixed models. In some case, certain expenses are managed through the use of allowances, while others are verified using receipts. Another option is to have an established allowance which has to be verified with a set of receipts. The company chooses whether to reimburse the exact amount of the total of the group of expenses or to round up the specific amount involved in the per day and mileage allowance which, at the same time, sets the maximum level that expenses can reach.

Moreover, as these payments can involve a significant expense for the company, it is important to take into account the benefits that can be achieved if we manage them effectively. In this respect, the use of a digital travel expense management platform is always advisable, regardless of the management model defined by the company. Greater efficiency with respect to this type of expenses enables a lot of time and effort to be saved, as well as enhancing the probability of detection and correction of errors and irregularities.

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