Travel Expenditure Controlling

Travel Expenditure Controlling


As businesses now-a-days have expanded beyond the boundaries of one individual state it is highly normal that there will be expenses related to travelling and controlling travel expenditure is an onus on businesses of modern days as cutting the expense down is the “In” thing right now. There are several ways to control such expense but, without a proper knowledge it is risky to implement any of those. Because, instead of reducing the expense it may cull that down and that won’t be of any good. Some important variables are here to remember in case any organization is going to have a check on travel expenditure:


Proper Documentation:

Travelling expense is paid in due in most of the cases. So, it is important to have the documents related to it. Without documents no cash should be paid to any employee as that will be believing only mouth fallen words and accounting procedures don’t have faith on such mere wording.


Different Department:

Travel expenditure controlling needs a different department as that is some section which may increase in volume and might even decrease varying business to business. For instance a garment factory will have high travel expenditure because they need to procure order and deliver them. On the other hand a software firm will have low or, even no travel expenditure. So, a business which has large volume of travel expense needs to have a separate section of their accounts to handle such issues.


Controlling Authority:

Management of the business should be the controlling authority of the softwares that the business uses to handle such expense. Because, rendering every single incident into the software is the duty of the accountant and if that can be altered wholly by the accountant then he can record transactions which hadn’t even occurred in reality and there is a high chance of fraudulent activities and creative accounting.


Now as we are discussing the issue let’s focus on the control points of travel expenditure controlling:

  • Once a year external audit is mandatory for businesses and that should never be overlooked,
  • There should always be a check, wherever possible, on the figure of that expenditure,
  • If the stated amount is correct then that should always be paid,
  • As the expenditure is paid in due, so, it is not advisable to grant any amount less than that stated in the voucher and if that is the actual amount. There is no point in hurting the cause of employees. Since they are paying the expenses from their own pocket, it will hurt them if, even after stating the actual amount, they don’t get paid. It may increase probability of fraudulent activities.
  • If the amount of expense is quite large then it is advisable to pay the employee in advance. But, that too even after checking that extensively.

Now, focusing on the journal entries:

  1. When the voucher is deposited:

Travel expenditure A/C

To, Accounts Payable A/C

  1. When the voucher is paid:

Accounts Payable A/C

To, Cash A/C

Miscellaneous A/C

Here, miscellaneous a/c might appear when the voucher is amounted to be more than the actual amount. If the voucher is stated less than the actual amount (Which is the most unlikely case) then that a/c should have to be debited.


This expenditure a/c enters income statement.


The accounts payable a/c(if any balance is left over there) will appear in the balance sheet


The miscellaneous a/c regarding the balance will appear in the balance sheet (If the balance is debit then on the Assets side and if the balance is credit then on the liabilities side).

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