How to manage business travel expenses, from trip request to settlement

On a Monday in September, a service engineer at a heavy-equipment dealer in Jakarta flies to Balikpapan to repair a hauler at a customer’s mining site. The trip is planned for five days. The engineer has a travel order signed by the service manager, a cash advance of Rp 4,000,000 for car hire and fuel, flights booked by the branch admin through the company’s travel agent and a hotel paid on the corporate card. A replacement part arrives late, and the trip runs to seven days.

Three weeks after the engineer is back, finance still can’t say what the trip cost. The flights are on the travel agent’s monthly invoice in AP, the hotel is on the card statement, the car hire is in the advance settlement, and the per diem and a customer dinner are in a claim. HR calculated the per diem from the travel order’s five days, the engineer claimed seven, and the advance is still open while they sort it out. The customer, whose service contract lets the company recharge travel and accommodation at cost, has been invoiced for about a quarter of it.

Business travel is the one expense that runs through every payment route at once. This guide covers what goes into a trip’s cost, how a trip should run from request to settlement, a worked example of that week in Balikpapan, why travel costs go wrong and how to give each trip one record.

What goes into the cost of a business trip?

Business travel expenses are every cost of sending an employee somewhere for work. They usually fall into four groups:

• Transport: flights, trains, ferries, car hire, fuel and tolls, or mileage for the employee’s own vehicle.
• Accommodation: hotels or guesthouses, usually capped by city and grade.
• Per diem: a fixed daily amount for meals and incidentals, paid by rule rather than by receipt.
• Costs on the ground: local transport, parking, excess baggage, visas and customer meals.

What makes travel hard isn’t any single cost. It’s that one trip is paid four ways: the company books part of it through a travel agent and pays the invoice through AP, the employee pays some on a corporate card, some from a cash advance and some out of their own pocket. Travel and expense management treats the trip as the unit, so every one of those costs is approved, recorded and settled against the same trip, whoever paid it.

How a business trip should run, step by step

1. Request and approve before travelling. Purpose, destination, dates, estimated cost and the cost centre, project or customer it belongs to, approved by whoever owns that budget.
2. Book through the agreed channel. Flights and hotels through your travel agent or on a corporate card, within the class and hotel caps in your policy.
3. Advance only the cash part. An advance covers what has to be paid in cash on the ground, not what the company has already booked.
4. Capture costs as they happen. Receipts are photographed when they’re paid and tagged to the trip, not collected in an envelope.
5. Update the request when the trip changes. An extra two days is a change to the approved trip, so the dates are amended and approved again.
6. Claim within days of returning. The per diem is calculated from the actual travel dates, card lines get their receipts and the advance is settled against the claim.
7. Close and recharge. The balance of the advance is paid or recovered, and costs that belong to a project or customer are coded there, so they can be recharged.

A worked example: one trip, four ways to pay

Here is what the seven days in Balikpapan cost, and where each cost was recorded:

Cost	Paid through	Rp ’000
Flights	Travel agent	4,860
Hotel, 6 nights	Corporate card	5,340
Car hire and fuel	Cash advance	2,950
Local transport and parking	Cash advance	640
Per diem, 7 days	Claim	2,100
Customer dinner	Claim	1,280
Total		17,170

The trip cost Rp 17,170,000, recorded in four places. Put side by side, two problems stand out:

• The per diem, Rp 700,000 apart. At a rate of Rp 350,000 a day, with half on the two days of travel (only an example), seven days come to Rp 2,100,000. HR used the travel order’s five days and got Rp 1,400,000. Nobody amended the travel order when the trip was extended, so both numbers could be defended, and the advance stayed open while they argued.
• The recharge, Rp 10,200,000 short. The service contract lets the company recharge travel and accommodation at cost: the flights, hotel, car hire, fuel and local transport, Rp 13,790,000. The engineer tagged the advance settlement to the customer’s contract, so Rp 3,590,000 was recharged. The flights and hotel, Rp 10,200,000, were coded to general travel in AP and on the card, and never reached the customer’s invoice.

Each payment route was handled correctly by the person who owned it. Nobody owned the trip.

Why business travel costs go wrong

• Trips are approved through the claim. The first time a manager sees the trip is when the receipts arrive, after the money has been spent.
• The request isn’t updated when the trip changes. Extra days, a changed destination or an added stop live in a chat message, not on the approved request.
• Nothing ties the costs to the trip. The travel agent invoice, the card line, the advance and the claim are each coded separately, so nobody can see what the trip cost.
• Per diems are calculated by hand. Partial days, meals provided by the hotel or a customer, and trips that change length are handled differently each time.
• Advances cover what the company already paid. An advance sized for the hotel as well as the cash costs leaves money with the employee for weeks.
• Billable trips are coded to general travel. Costs the customer or project should carry stay in overheads, and the margin looks worse than it is.
• Claims arrive weeks later. By then thermal receipts have faded, and nobody remembers which dinner was with which customer.

Business travel in Indonesia

• The SPPD is the trip request. Many companies issue a travel order (Surat Perintah Perjalanan Dinas, or SPPD) or assignment letter (surat tugas) before a trip. Make it the request: purpose, destination, dates, estimated cost and the cost centre or customer, and amend it when the trip changes rather than leaving the original dates in place.
• Per diems and PPh 21. Whether a per diem (uang harian) counts as the employee’s income for PPh 21 depends on how it’s set and paid. Write the rates and the partial-day rules into your policy, apply them the same way every time and confirm the treatment with your tax adviser.
• Tax documents for travel. Where you credit input VAT (PPN masukan) on travel costs, such as a travel agent’s fees, the faktur pajak has to be in the company’s name and NPWP, which is easier when the company books than when an employee pays and claims. Hotel rooms are generally charged regional hotel tax rather than VAT, so check with your tax adviser what can be credited.
• Long trips to sites and outer islands. Trips to mines, plantations and project sites in Kalimantan, Sulawesi or Papua often run long, and some costs can only be paid in cash. Size the advance to the cash part and settle it within days of the employee’s return.
• Recharges to customers and projects. Service and project contracts often allow travel to be recharged at cost. Tag the trip to the project or customer when it’s requested, so every cost carries the tag, whichever way it was paid.

Signs your travel expenses need work

You probably need to look at how you manage travel if any of these sound familiar:

• Trips are approved when the claim arrives, not before they start.
• Nobody can say what last month’s trips cost until after the month-end close.
• The travel order still shows the original dates after the trip was extended.
• Advances include money for hotels the company has already paid.
• HR and finance calculate different per diems for the same trip.
• Trips for customers are coded to general travel.
• Claims arrive weeks after the trip, with faded receipts.

A trip is one expense paid four ways. Give it one record, and the four add up.

How to set up travel expense management

1. Write the travel rules into your policy. Who approves trips, the travel class, hotel caps by city and grade, per diem rates with partial-day and meals-provided rules, and what the company books directly. They belong in your expense policy.
2. Approve every trip before it starts. One request per trip, with its purpose, dates, destination, estimated cost and the cost centre, project or customer.
3. Book centrally where you can. Through your travel agent or a corporate card, so the booking and its tax documents come to the company.
4. Advance only the cash costs. Calculate the advance from what will be paid in cash on the ground, not from the trip’s total.
5. Tag every cost to the trip. The travel agent invoice, card lines, advance settlement and claim each carry the trip and, where relevant, the customer or project.
6. Calculate per diems from the actual dates. By rule, with partial days and meals provided deducted, so HR, finance and the employee get the same number.
7. Close each trip within a week of return. The claim submitted, the advance settled and billable costs recharged, before the next trip starts.

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How Procapy helps

In Capy Expense, ProcAI reads each receipt as it’s photographed or forwarded and proposes the category, cost centre, project, client and trip, then attaches the line to the right expense report or cash advance. Foreign-currency receipts are converted at the day’s rate, with both amounts stored. Per diem rates by country, city and grade are applied from the travel dates, with partial days and meals-provided deductions handled by the rules, and mileage takes a distance and a vehicle type and returns an amount. The employee enters the trip, not the arithmetic.

Cash advances are requested, approved and paid in the same flow, and settled against the claims that follow. Corporate card transactions are matched to receipts as they’re photographed, so an employee’s out-of-pocket, advance and card spend are in the same claim history. Before a report can be submitted, every line is checked against your expense policy, and travel claims are checked against the trip dates and destination on the request. Managers approve from their phone with the receipts in view, and approved reports are paid in one reimbursement run with open advances netted, then posted to Dynamics, SAP, Xero, QuickBooks or ABSS with every receipt and approval attached.

The employee experience page covers the claim flow from the employee’s side. Book a 30-minute walkthrough, bring your travel policy and your per diem rules, and we’ll configure the first claim flow live.