Keeping Track of M&IE Business Expenses: What You Need to Know
The organization and schedule of corporate travel are often heavily influenced by a company’s finances. Therefore, keeping track of per diem purchases while on a trip is essential.
M&IE, or “meals and incidental expenses”, is a common per diem expense category and is generally the main focus of cost reporting and review because most M&IE purchases are not predetermined.
Keep reading to find out what you need to know about keeping track of M&IE business expenses.
Understanding Per Diem
Originally derived from Latin, Per Diem means “per day” and as you might have guessed, per diem is a daily allowance that an employer provides to one of their employees in addition to their wage.
Per diem can be used in many instances but is most commonly referred to when planning business travel.
Travel is considered per diem if an employer provides a daily budget that is either disbursed before departure or, the employee uses their own budgeted funds that will be reimbursed after the trip.
Any purchases that go over the per diem allowances are generally not reimbursable.
What Does M&IE Include?
As one would expect, the meals included in M&IE are breakfast, lunch, and dinner. Incidentals, on the other hand, are a bit more tricky.
Incidentals refer to the small tips and fees that go hand in hand with meals, lodging, and other accommodations. Examples are tips to the restaurant’s waitstaff or a hotel’s bellhop.
Each company’s M&IE allowances are different; however, the average amount is around $50 daily.
M&IE allowances are also commonly used for government employees, and the daily amounts are dependent according to state and travel destination
You can learn more about M&IE expenses at Hotelengine.com
Budgeting your meals and incidentals funds can be a tricky task that requires quite a bit of planning.
As mentioned, the average M&IE budget is fifty dollars. In some cities, this is more than enough money to get you through the day. In other cities, fifty dollars won’t get you to dinner. The issue is that most companies don’t adjust their fund allowance according to cost fluctuation.
Although the process is lengthy, you may want to look into various restaurants and their prices. You can plan each day’s meals according to menu prices or you can keep a list of the restaurants and their prices and then wing it as meal times come around.
It is important to factor tips and fees into each meal when planning your daily budget. Also, don’t forget about the tips you will be giving to hotel employees, dry cleaners, drivers, etc.
To save money where possible, consider sharing meals and tips with co-workers. Instead of spending $20 on one dinner and a tip, your team members can contribute a few dollars to a pizza order that can be eaten back at the hotel.
Tracking and Reimbursing
M&IE funds can be distributed and used in various ways; however, it is most common for employees to spend their own money and be reimbursed in the future.
When using this method, it is important to budget each day’s meals and keep track of what you are spending.
Every time you spend money on a meal, save the receipt for your records. Having these receipts is important for reimbursements since they serve as proof that these purchases were made. Proof of purchase is required if your company plans to write these expenses off at tax time.
The best way to track your expenses is by taking photos of your receipts and uploading them to a digital folder. Your digital folder can be on a computer, in a mobile app, or a spreadsheet.
Your company may have a program or software that is used for uploading expenses. Check your corporate travel policy or speak with your travel manager to find out if your company has a preferred tracking method.
After your trip, you will want to start the reimbursement process. Although some companies have their employees claim travel expenses on their personal taxes, you will likely be reimbursed by your employer.
You can make the reimbursement process easy by adding all digital receipts to a file according to date and time. Your company may request that you fill out reimbursement forms outlining the total dollar amounts for each meal or day. After all photos and forms are turned in, they will be approved, and your reimbursement will be dispersed.