What is per diem?

In simplest terms, per diem is an allowance paid your employees for travel expenses.

Per Diem

You can pay per diem expenses for the following categories:

• Meals
• Incidentals
• Lodging

Per diem covers employee’s travelling expenses and reduces paperwork required when used within guidelines defined by the United States – Internal Revenue Service.

Web2Expense – Travel Expense Report Management Software provides an integrated solution for companies, organizations and institutions to automate their expense reporting system.

GSA – IRS Per Diem Rates Within Continental US

One of the big problems associated with standard GSA – IRS per diem rates is their way of presentation both in GSA and IRS web sites. By the way if you are confused about these rates the simple way to remember them are as follows:

• GSA Per Diem Rates = IRS Federal Per Diem Rates (Publication 1542 – Tables 3 and 4)
• IRS High-low rates does not correspond to any rates on the GSA side (Publication 1542 – Tables 1 and 2)

In order to address this issue we have exposed the standard per diem rates in our portal you can use following links to query our databases for the standard rates:

• Web2Expense – GSA Reference Page
• 2008 Mileage Expense Rate Page
• Web2Expense – Query Interface

If you are testing Web2Expense you can upload these policies as depicted in the screenshots:

Web2Expense - Edit Policy

 

 

Expense Report Policies for GSA Per Diem Rates and IRS Publication 1542

In our earlier blogs we have talked about the GSA Per Diem rates and IRS Publication 1542 and our solution for creating an automated business process to implement High-low or Federal Per Diem methods.

The way we resolved this issue in Web2Expense was using multiple expense report policies for different localities which are valid between certain time periods. However, entering these policies by hand created a significant challenge within itself because there are so many of them.

Recently, we have automated this process. With one click you can upload these policies and start using them immediately. There are close to 1000 US cities and time intervals covered with these policies.

If your company or organization is using or planning to use GSA per diem rates as specified in IRS Publication 1542, Web2Expense – Travel Expense Report Management Software will provide the automated solution you need.

Mileage Expense Tracker – Why did we create it and why free?

In this blog I would like to give a little bit of the drive and the motivation behind creating the Mileage Expense Tracker.

Well those of you who have visited our site and signed up for the MET know that it is a free and useful tool to keep your mileage expenses and record your business trips. By doing so you cannot save 15% or more on your car insurance, but you can save a lot of money on your taxes. 

However, I must admit, my drive for creating a tool such as MET was not about saving money.

Here is the story.

When I was working as an independent consultant (making a lot of money for my standards) my accountant Ken always asked for my business miles. Honestly, I never kept a good record of them (none to be exact). Therefore, I never claimed any of my business mileage expenses.

I was busy making money, right?

No, I was wrong and stupid.

Once you make money you may as well keep as much of it as you can.

None of the reasons so far explain the reason for the creation of Web2Expense – Mileage Expense Tracker. The reason was my accountant’s small black leather covered notebook.

Every year in February I go and see my accountant Ken; he is a CPA by the way.

For some reason, every year Ken takes out (from his shirt pocket) his small black leather covered pocket notebook and waves at me and asks “Semih, did you bring the record of your business miles with you?” And as you may have guessed it by now my answer was always ‘no’. I always said “Ken I have not kept a record of my business miles.” He shakes his head, adjusts his glasses again and returns back to the other pages that I kept very neatly for my taxes throughout the year. I always felt like a kid who did not do his or her homework. Though I always wanted to shout back at him and say “Ken don’t treat me like a kid I am 48 years old and I always keep excellent records for all my other expenses.”, I never did.

Well I hated that and I intended to change it. Therefore, I asked our lead developer Hakan how much effort it would take to create a mini version of Web2Expense – Travel Expense Report Management Software. When I heard the amount of energy required to do so, I jumped on the project. I want to have something better than the small, black, leather-covered notebook. Well, we did.

Here it is, now you know, the real story behind the Web2Expense – Mileage Expense Tracker.

Why free?

This software is free and can save you a large sum of money.  In my case, I could have used some of that money that went to IRS for my son’s college tuition.

Semih

P.S. For the next year I am planning to send my mileage expenses to Ken as a spreadsheet attachment. You can do the same because now you can export to Excel (One of my friend’s suggested the feature).

To Expense or Not To Expense

To Expense or Not To Expense

 When it comes to mileage expenses or travel expenses you need to keep good records for your claim.

As the 2008 mileage expense rate increased to 58.5 cents per mile business usage of your personal car can become a major federal income tax deduction. With today’s mileage expense rate 10,000 miles equate to $5,850.

However, there is a catch. If you do not keep good records and get audited this claim can be hard to prove. Take a look at Web2Expense – Mileage Expense Tracker, a free expense tracking tool to keep track of your mileage expenses.  You will be happy you did…

PS. Web2Expense – Mileage Expense Tracker is Apple iPhone compatible.

New Features of Mileage Expense Tracker

Web2Expense – Mileage Expense Tracker just got better. Some of the added or improved features include:

• Guided sign up process
• Parking and toll expense types added to mileage expense report(s)
• All new gas calculator added to the menu so that you can calculate how much gas you spend each mile
• Gas calculator also keeps track of your overall gas expense

Best of all Web2Expense – Mileage Expense Tracker is FREE! Sign up and start using it today.

iPhone users please use this link to sign up.

For questions and suggestions feel free to leave us a comment.

Rules To Use Standard Mileage Expense Rate

There are two basic rules set by IRS for using standard mileage expense rate:

1. First Year Rule – When you buy a car or truck and you would like to use that  vehicle for your business you can claim standard mileage expense (for the second half of 2008 the standard mileage expense rate is 58.5 cents). However, you have to make this decision in the first year your car is available for business use. If you use actual expenses for your car in the first year you cannot switch back to using standard mileage rate.
2. Five Car Rule – If you have a business, like fleet  which operates five or more car simultaneously you cannot use standard mileage rate.
3. For Hire Rule – Your car must not be used for hire such as a taxi.

To learn how you can manage your business expenses effectively visit Web2Expense – an advanced travel expense report management system and sign up for a 30 day free trial.

Expense Report Approval – A Manager’s Perspective

Corporate managers mandated to keep a hawkish eye on rising costs for their projects and departments. Skyrocketing fuel prices caused significant increases in travel expenses. While costs are increasing, companies are having hard time to pass these expenses to their buyers.

What can you do?

How about starting with an advanced travel expense reporting software and using it religiously. Web2Expense allows managers to start controlling expenses before they occur. After all budgeting helps.

Web2Expense – Travel Request Management menu allows managers to put a firm grip on anticipated expenses before they occur. Since employees itemize their anticipated expenses before they go to a trip they would be less likely to spend on items without manager’s explicit approval. Combine this with a good per diem policy to get predictable expense reports, you got yourself an expense reporting process working the way you wanted to.

In this market being predictable is good and being within budget is better.

Adopting Per Diem Policies in Expense Reports

It is always a challenge to find the right software to implement government rules and regulations. This is especially true in the area of travel expense reporting.

The government rules, regulations and rates are constantly changing. So how do you adapt?

At Web2Expense our answer to this dilemma was to create a system capable to handle unlimited number of travel expense policies. Within hours you can map all the rules and regulations that your company will need into the Web2Expense. You can also edit these expense policies when needed.

These policies can help your company or organization by standardizing overall travel expense reporting process and eliminating inconsistencies. Both high-low and federal per diem substantiation methods designed by IRS to remedy such problems. These substantiation methods are very easy implement in Web2expense.

Take a look at IRS Publication 1542 or GSA Domestic per diem rates for the Continental United States (CONUS) and open them side by side with a Web2Expense policy document and start implementing.

You can learn more by visiting Web2Expense knowledge repository or by starting your free 30 day trial.

Expense Report Required Receipt List

 In our earlier blogs we have provided information to setup a limit for expense receipts. This limit should be $75 or less in the US and it is set by the Internal Revenue Service.

Web2Expense allows to setup different receipt limits for different projects by assigning different expense policies to different projects. However, you should check with your CPA the tax implications of such a configuration before you implement such an advanced business process.

When employees adds an expense item to an expense report the system checks this item against the expense policy and adds this item to “Required Receipt Report” queue if the item is above the limit specified in the policy document. Following screen shot depicts the “Required Receipt Report” link.

Web2Expense – Required Receipt Report Link

 

The report displays only those expense items higher than the limit set in the expense policy document. In this expense report CPK item $100.00 and Mc Donald’s item is $20.00. Therefore, “Required Receipt Limit” report only displays CPK item for $100.00.

Web2Expense – Required Receipt Report

To learn more visit Web2Expense.com or watch the following videos:

• ACME MEDICAL Expense Report Business Scenario
• ACME MEDICAL Expense Report Implementation Part 1
• ACME MEDICAL Expense Report Implementation Part 2
• Expense Approval – Employee Perspective