Track Standard Per Deim Meals
C_M
Member Posts: 2
I'm new to Wave and have a couple questions regarding business meal tracking. We are a 2 member LLC and have decided to use the standard travel per diem meal rate for Accounting/Tax purposes vs the actual costs.
What is the best way to track/record the trips and that rate?
This question may not apply based on the answer to #1 but if the actual meals come through as a transaction (on corporate card) is there a way to prevent them from showing as two outflows?
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Hey @C_M !
This one is a bit tricky for me to tackle since we here at Wave Support are not accountants. With that being said, I'll try my best to assist you.
1) I'm afraid that I am unable to provide any insight on rates. However, when it comes to the bookkeeping, I may be able to point you in the right direction.
To begin, there are a couple of different ways you might be able to account for this. If you are recording the expenses on your own card and then being reimbursed after the fact, you could simply record the expenses normally. Then when you receive the per diem, you could break down the amount by splitting the transaction, assigning it as a refund for those expenses.
You could also create an Asset account in Accounting > Chart of Accounts for the per diem, put the value of your per diem in the account, and then create a transfer in Wave from the per diem account to your bank account to show when you're using those funds.
2) I'm having difficulty understanding your second question. Do you mind clarifying how you currently have the per diem setup? Are you in fact using a corporate card? If so, do you mind sharing a use-case scenario with me? Also, do you mind clarifying what you mean by "two outflows"? Additional information will give me a better understanding of your inquiry and will allow me to assist you further.
Hi Julian - Thanks for your response and 100% understand that you aren't accountants and I probably could have asked my question better.
The IRS allows us to take either 50% of the actual cost for meals or the standard meal allowance which lets say is $50 per day (it varies by location and changes for first/last day of travel). If I plan to use the standard allowance and want to keep track of that is there a recommended or best practice within Wave? Lets say there is a 5 day business trip and I wanted to record a meal allowance of 250 ($50x5) how would that best be tracked within the tool? There isn't an actual payment to anyone planned it is an expense on paper only.
We just started this year but at the moment we have been tracking trip start/end dates on paper for use at tax time and when we put together financial statements. At the moment there are some meal expenses that are paid for using the corporate credit card and some on personal (bad practice I know). My two outflows point was referencing that if we have both the actual meal expenses ($35 at a restaurant) and the standard per diem "expense" tracked wouldn't that show a double expense?
Hey @C_M ,
Just to reiterate (although I think you already know the deal), we highly recommend you reach out to an accountant who can offer you the best workflow on how to account for this. I can't say for sure that I know what the best way would be, but based on the way you're explaining this, if you spend $35 at a restaurant you can split the expense/transaction into two categorizations (doable through the transaction itself in your Transactions page). You're then able to categorize 50% to the per diem cost and the other 50% to a business expense.