Hi all,
We have frequent employee foreign travels. We have been purchasing foreign currency and paying them as an advance. After return, we are booking expenditure with the currency on the date of submission & deducting the advance paid in INR. Due to which there is a loss/gain to the employees on the travel. When a loss comes i am facing problems from the staff & not able to explain them.
Example:
A went on USA business tour for 10 days. The advance paid 500 USD ( @ Rs. 44/-) & advance booked as Rs. 22,000/- in the accounts. After 10 days, A submitted bills of 700 USD and claiming 200 USD as payable after advance adjustment. The current rate is Rs. 43/-.
My treatment as below:
Total Expenditure (700 * 43) Rs. 30,100/-
(Less) Advance paid Rs. 22,000/- (sothat the advance becomes zero)
Balance payable Rs. 8100/-
Employee treatment as below:
Total Expenditure USD 700
(Less) Advance paid USD 500 (the advance would not be zero as 500*43=21500)
Balance payable Rs. 8600/- (200 * 43)
Which one is correct & advisable? And we have a policy of tour allowance of 10 USD per day also. I have been calculating the allowance as on the date of submission of travel bill which is being objected by the employees. Can any one suggest me a way to solve this problem in a win-win situation, please?
Best Regards
Singh
CAclubindia
