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RichardG
Routine Member - Level 3

Paid meal allowances v actuals on the Corporate Card.

I am currently writing a paper for our Executive Board proposing to move from paid travel allowances to credit card actuals.
Currently based on the travellers itinerary we pay $110AUD for B/L&D and an extra $20 per 24 hours for incidentals. Roughly we spend $2.5m in this area for Domestic allowances and as it is an allowance we cannot claim the 10% tax rebate. I'd love to hear from anyone in the community about their experiences transitioning to actuals. Did you notice savings in Meal spend? Did instances of fraud increase? How did you handle alchol with meals? Were the tax savings eroded by the extra administrative resurces required to acquit these transactions and monitor non compliant spend?

Thanks in advance
Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics
16 REPLIES 16
tjbmoreno
Routine Member - Level 2

We've not transitioned . . . we've always used actuals.  The company that just purchased us, however, uses a per diem.  So we will actually be going the other way . . . transitioning from actuals to allowance.

I'd be interested in seeing some of the responses you get, @RichardG!

 

 

 

 

Terri Moreno
Looking for new opportunities!
Anaren, Inc. - Travel Manager - Syracuse, NY
RichardG
Routine Member - Level 3

Hi @tjbmoreno,
I received 11 responses yesterday from my Australian Government Agency contacts about this. There was a mix of per diem and actuals. The biggest driver for those who transitioned to actuals was savings on allowance spend, the ability to reclaim the input tax credits and better visibility. Those who were hesitant to move to actuals were waiting for the next round of their employee enterprise agreements where negotiating such a change can be tricky and the development of clear policies on acceptable daily meal and alcohol spend. Other deterrents to move away from per diems was the increased administrative burden on the end user and the business team to detect to ensure transactions were in policy. Having said that agencies that had transitioned reported savings of between 20 and 30 per cent and made it incumbent on the user to make defensible and reasonable decisions when it came to meal and alcohol purchases.

We'll see what responses we get from our community.

Kind regards
Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics
Arntzie
Occasional Member - Level 3

We have both actuals and per diems currently in place.  I would suggest you have some clear guidance on actuals.  Currently, our policy indicates meals will be reimbursed at actual/reasonable costs.  This is open to interpretation.  What I consider reasonable may differ from what you consider reasonable.  I may choose to eat breakfast at one location and consider it 'reasonable' to also purchase my favorite Starbucks drink and a muffin as part of my breakfast.  🙂  Often times, leaders are calling my department to obtain guidance on what is considered 'reasonable'.  We end up pointing them to the per diem for the location as guidance.  In my opinion, per diem offers the guidance and limits which actuals do not.

RichardG
Routine Member - Level 3

Thank you so much for your advice @Arntzie (Ange). Development of a clear policy on actuals is going to be paramount to this transition as you indicate. I have had internal email responses advising some organisations set daily limits using daily per diem rates as guidance as opposed to singular meal limits, while others stipulate the opposite - i.e they won't accept a $100AUD dinner even though you have starved yourself through Breakfast and Lunch. There is also a wide variety of reasonableness responses on the purchase of alcohol - from absolutely no alcohol to two drinks allowable with dinner - you're right what's reasonable for one person is not necessarily the same for another!

Kind regards
Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics
Arntzie
Occasional Member - Level 3

Speaking of alcohol....  If expensing one meal (i.e. eating alone), it is reasonable to purchase one alcoholic beverage.  When expensing meals with additional guests our rule of thumb -  alcohol cannot exceed 30% of the total meal value.  Anything over and above may be considered excessive.  Of course, business purpose and other expenses submitted on the same day are taken into consideration.  It's been quite helpful for us to have this guidance in place.

RichardG
Routine Member - Level 3

Thanks for that @Arntzie (Ange) - is that 30% of total meals cost only or meals plus alcohol cost?

Kind regards
Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics
Arntzie
Occasional Member - Level 3

Total meal cost only.

RichardG
Routine Member - Level 3

Thanks Ange!

Kind regards
Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics
tjbmoreno
Routine Member - Level 2

Our current policy doesn’t address alcohol at all - so by virtue of omission, it is permitted. I don’t agree with that approach, but could never get senior management buy-in to change it.

The company that just acquired us has a no alcohol policy for employee-only meals. Business meals and entertainment permit alcohol but don’t have a limit on how much.
Terri Moreno
Looking for new opportunities!
Anaren, Inc. - Travel Manager - Syracuse, NY
RichardG
Routine Member - Level 3

Thanks Terri - some of my email responses also said our policy is silent on alcohol. I agree with you - you cannot operate like that. It will be interesting to see how the staff adapt to the new company policy of no alcohol with individual meals!

Kind regards
Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics
JessicaL
Routine Member - Level 3

We have a limit to our meals as well, $80 per person. When the flag comes up, it generally nudges the expense reporter to show the breakdown of the meal - food/alcohol/tip. We also prefer itemized receipts but do not yet require them. This is due to the fact that many of our preferred hotel partners and more large businesses are pushing through level 3 data that has the breakdown on there. 

Jessica
Travel and Expense System Administrator
RichardG
Routine Member - Level 3

Thanks Jessica for your feedback!

Greatly appreciated!
Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics
tjbmoreno
Routine Member - Level 2

We use actuals with a suggested guideline for a daily limit.

One thing to note is that with actuals, especially if you have a no alcohol policy, you should require itemized restaurant receipts - not just the credit card slip.
Terri Moreno
Looking for new opportunities!
Anaren, Inc. - Travel Manager - Syracuse, NY
Arntzie
Occasional Member - Level 3

Absolutely agree with you.  We've found some very interesting purchases when the itemized receipts are attached!  Actually, we do not reimburse lunch (unless required by statutory requirements).  The time of purchase on the receipts have become key to us as well when reviewing meal expenses.  😉

jessek21
Occasional Member - Level 2

We switched from travel allowance globally to actual meal expenses with a daily cap at $85 domestic / $110 overseas (USD). Travel allowance was still in place for some Countries who require that type of meal reimbursement.

The company ended up saving ~ $1 million a year on individual travel meals ~ 1500 employees expensing meals. 

RichardG
Routine Member - Level 3

Thanks @jessek21 - that is a real good news story!  Thank you for sharing!

Kind regards

Richard Grigg
Assistant Director, Business Services
Australian Bureau of Statistics