How to Properly Account for Business Travel Expenses in 2025

Proper accounting of business travel expenses is one of the most common tasks in bookkeeping — and also one of the easiest to get wrong. The way documents are prepared and daily allowances are calculated affects not only the company’s tax compliance but also its overall financial transparency.

Business trips are not just about tickets and hotels — they represent a complete system of settlements with accountable employees, regulated by law and the company’s internal policies.

Errors in accounting can lead to tax adjustments, fines, or unnecessary questions from regulatory authorities.

In this article, we’ll explain how to properly account for business travel expenses, which documents are required, how to record transactions in accounting, and what specific rules apply to companies operating in Moldova.

This material will be useful for accountants, business owners, and anyone responsible for financial reporting.

💡 If you prefer to entrust your accounting to professionals, contact Intelcont — we provide accounting services in Moldova and help companies establish proper financial control and reporting processes.

What Are Business Travel Expenses and When Do They Apply

Types of Business Travel Expenses

Business travel expenses are the costs an employer incurs when sending an employee on a business trip to perform their work duties outside their regular place of employment.

They include all payments and reimbursements necessary for completing business tasks during the trip.

The main categories of business travel expenses include:

💡 Daily allowances and additional costs are classified as general business expenses when they are properly documented and related to professional purposes.

When a Trip Qualifies as a Business Trip

A trip is considered a business trip by employer’s order if the following conditions are met:

1. The employee is sent by an official order or directive from management.
2. The trip’s purpose is related to the company’s operations (meetings, audits, implementation, training, etc.).
3. The employee’s job position and average salary are maintained during the trip.
4. The employee must submit an expense report after returning.

📌 Note: If an employee works permanently in another branch, it is not considered a business trip — such costs are treated as regular operating expenses.

Local Regulations for Business Trips in Moldova

In Moldova, the organization and accounting of business trips are governed by the

Legal Framework and Specifics of Accounting for Business Travel Expenses

Accurate accounting for business travel expenses is impossible without understanding the underlying legal framework.

Although most accounting principles are universal, each country has its own requirements for documenting and reimbursing business trips.

Main Documents Regulating Business Travel Expenses

For companies operating in Moldova, the organization and reimbursement of business trips are governed by the following documents:

1. Labour Code of the Republic of Moldova (Art. 174–176) — regulates employee travel orders, salary retention, and expense reimbursement.
2. Fiscal Code of the Republic of Moldova — defines which expenses are deductible for tax purposes.
3. Accounting and Financial Reporting Law (No. 287/2017) — sets the requirements for documenting business transactions.
4. Internal company regulations — business travel policy, internal orders, expense policy, and approved limits.

Document Requirements for Business Trips

To recognize expenses in both accounting and tax records, they must be properly documented.

The following documents are mandatory:

• Business trip order — issued before the employee’s departure.
• Service assignment (if applicable) — defines the purpose and objectives of the trip.
• Advance report — accompanied by the original supporting documents.
• Supporting documents: tickets, hotel invoices, receipts, and bills.
• Trip completion report — if required by internal policies.

💡 Modern practice allows electronic confirmation of expenses (e-invoice, e-tickets), but originals must be kept in accounting records for the legally required period.

Limits and Rules for Reimbursement

The company sets its own per diem limits, which must be stated in internal regulations.

If no limits are defined, the minimum daily allowance established by the state applies (for Moldova — according to the Ministry of Finance, updated annually).

Expenses exceeding the limits may be recorded:

• for accounting purposes — in full (if properly documented);
• for tax purposes — partially (within the allowed limits), and the excess is subject to income tax and social contributions.

Accounting for International Business Trips

Additional rules apply to foreign business trips:

• per diem is established in the currency of the host country;
• expenses are converted into Moldovan leu at the NBM exchange rate on the date of the expense report;
• documents must include customs declarations, visas, and insurance policies.

💡 When dealing with foreign currency, it is essential to record transactions correctly and adjust for exchange rate differences in accounting registers.

Accounting for Business Travel: Entries and Examples

Business travel expenses are recorded under general accounting rules using Account 71 “Settlements with accountable persons”.

All operations are recorded according to the stage: advance issuance, expense recognition, reimbursement of unused amounts, and report closure.

1. Issuing an Advance for Business Travel

Before departure, the employee receives an advance to cover estimated expenses: transport, accommodation, per diem, etc.

The amount is issued based on the employee’s request and the business trip order.

Typical journal entry:

💡 If the advance is issued in foreign currency, additional entries must be made for exchange rate revaluation based on the NBM rate.

2. Recording Actual Expenses

After returning, the employee submits an expense (advance) report with all supporting documents.

The accountant verifies the accuracy of the amounts and records the expenses accordingly.

Typical journal entries:

All transactions must be supported by original documents — tickets, invoices, or receipts. Electronic documents are acceptable if compliant with legislation.

3. Reimbursement of Unused Amounts

If part of the advance remains unspent, the employee must return the balance to the company’s cash desk within three working days after report approval.

Journal entry:

Debit 50 (cash) / Credit 71 (accountable person)

If the actual expenses exceed the advance, the company reimburses the difference — the entry is reversed.

4. Report Closure and Tax Accounting

Once the report is approved by management, expenses are recorded as follows:

• In financial accounting — by type of expense (administrative, commercial, etc.);
• In tax accounting — only within the limits allowed by law.

💡 Important: business travel expenses are included in production cost only if related to income-generating activities. If the trip is personal or not economically justified, expenses are non-deductible for tax purposes.

5. Practical Example

The company issued an advance of 5000 MDL to an employee for a business trip to Chișinău:

• transport — 700 MDL;
• accommodation — 1200 MDL;
• per diem — 600 MDL (300 × 2 days);
• returned to cash desk — 2500 MDL.

Accounting entries:

1. Dt 71 Ct 50 — 5000 MDL (advance issued)
2. Dt 26 Ct 71 — 2500 MDL (expenses recognized)
3. Dt 50 Ct 71 — 2500 MDL (unused balance returned)

Result: report closed, expenses recorded, balance returned — operation completed correctly.

💡 Intelcont Tip:
To simplify expense reporting and avoid errors, we recommend implementing an internal policy for travel accounting and an automated reporting form.

This helps prevent fines and ensures effective financial control.

Taxation and Specifics When Exceeding Limits

Business travel expenses directly affect the company’s taxable base.

Errors in their calculation can lead to tax authority claims, so it’s essential to know which amounts are deductible and which are taxable.

Non-Taxable Items

According to the Fiscal Code of the Republic of Moldova, the following are not subject to taxation:

1. Per diem payments within the established limits set by the company’s internal travel policy.
2. Actual transportation and accommodation expenses supported by original documents (invoices, tickets, receipts).
3. Mandatory service-related payments (insurance, visas, registration fees).

These amounts can be recorded as follows:

• in accounting — in full,
• for tax purposes — only the part supported by valid documentation.

Example: If an employee receives a per diem of 400 MDL and the internal policy limit is 350 MDL, the excess of 50 MDL is subject to income tax and social contributions.

Taxable Items

The following are subject to taxation:

• Expenses exceeding approved limits;
• Expenses without supporting documents;
• Trips not related to the company’s business activities (e.g., personal travel).

In such cases, the amounts are considered additional employee income, and the company must withhold and remit income tax and social insurance contributions.

💡 Important: if limits are not defined, the tax authorities apply minimum state standards. Therefore, it’s strongly recommended to specify per diem amounts and allowable expenses in the internal travel policy.

Specifics for International Business Trips

Special rules apply to foreign business trips:

• per diem is set in foreign currency;
• conversion is made at the NBM exchange rate on the date of the expense report;
• expenses are recorded only when supported by documents (hotel invoices, air tickets, visa fees, etc.);
• amounts exceeding the limits are also taxable.

Example: An employee traveled to Romania and received 150 EUR per diem, while the company’s limit is 120 EUR. The difference of 30 EUR is considered taxable income.

How to Avoid Tax Risks

To minimize the risk of additional assessments, the company should:

1. Develop and approve an internal travel policy;
2. Establish per diem limits and spending norms;
3. Ensure the storage of primary documents for the legally required period;
4. Record all expenses promptly in accounting registers and policies.

✅ Tip: Include clear rules for calculating expenses on international trips in your internal policy — this is often overlooked and frequently causes tax errors.

💬 Intelcont Recommendation:
To avoid calculation mistakes and ensure full compliance with tax law, trust these processes to professionals.

Intelcont experts can help you properly structure tax accounting for business trips, record operations on time, and minimize audit risks.

Practical Recommendations for Accountants and Accountable Employees

Proper accounting for business travel expenses involves not only correct journal entries but also organizing the entire process within the company — from issuing the travel order to approving the expense report.

Below is a list of key steps that will help accountants and employees avoid common mistakes.

Step 1. Prepare Documents Before Departure

Before sending an employee on a business trip, it’s necessary to prepare the following:

1. Business trip order — indicating purpose, duration, and responsible persons.
2. Service assignment — if a task report is required.
3. Advance request and estimated expense calculation.
4. Business travel policy — an internal document defining per diem norms, spending limits, and documentation rules.

Tips:

• Ensure the order includes all details: job title, dates, destination, and purpose of the trip.
• For international trips — include information about currency and exchange conversion.

Step 2. Control Expenses During the Trip

It is recommended to inform employees in advance which expenses are reimbursable and remind them to keep original supporting documents.

Supporting documents include:

• transport tickets and baggage receipts;
• hotel invoices;
• fuel or car rental receipts;
• fiscal receipts for communication, parking, and visa fees.

💡 Important: all receipts must be issued in the company’s name or in the employee’s name who was sent on the business trip.

Step 3. Submit the Expense Report After Returning

The employee must submit an advance (expense) report within 3 working days after returning.
The accountant reviews the documents, verifies the expenses, and submits the report for managerial approval.

Retention period for reports and documents — at least 5 years (as per Accounting Law No. 287/2017).

💬 Practical tip: use a standardized expense report template with mandatory fields for amount, date, currency, signature, and order reference. This simplifies verification and reduces errors.

Step 4. Maintain an Internal Travel Register

To organize data and simplify control, it’s recommended to maintain an electronic travel log — in 1C, Excel, or CRM systems.

The register should include:

• order number and date;
• employee name;
• destination and purpose of the trip;
• advance amount and total expenses;
• report status (approved / under review / closed).

This helps prevent document duplication and facilitates quick preparation for audits or tax inspections.

Step 5. Avoid Common Mistakes

The most common mistakes in business travel accounting include:

1. Missing order or manager’s signature.
2. Trip purpose not related to company activity.
3. Lack of supporting documents.
4. Late submission of the expense report.
5. Payment of per diem without an internal regulation.

⚠️ Any of these errors may result in the exclusion of expenses from tax accounting and penalties during audits.

Tip from Intelcont specialists:
We recommend implementing accounting process automation to track reports, control limits, and ensure timely submission of documents.

Our solutions help companies manage accountable persons and travel expenses accurately and efficiently.

Learn more on the page Accounting Support for Companies in Moldova.

Frequently Asked Questions and Practical Cases

Business trips often raise questions among accountants and managers — especially in non-standard situations. We’ve collected the most common cases and provided clear answers based on Moldovan accounting legislation and practice.

Question 1: What if a business trip lasts more than 2 months?

If a trip exceeds 60 calendar days, it is no longer considered short-term, and a travel extension order must be issued.

In this case:

• per diem continues to be paid,
• but the company must justify the extension — through a service note or progress report.

💡 Important: if the employee works at the business trip location for a long period, consider a temporary transfer or opening a branch to avoid tax risks related to the permanent place of work.

Question 2: What if the employee doesn’t submit the expense report on time?

According to the Accounting Law, the accountable person must submit the expense report within three working days after returning.

If the deadline is missed, the accounting department:

1. notifies the employee in writing;
2. may withhold the unreported amount from salary;
3. records the debt on Account 71 as overdue.

⚠️ A late report may result in the advance being recognized as employee income, subject to income tax and social contributions.

Question 3: How to record accommodation expenses if the employee returns daily?

Such trips are not considered business trips, and transport and meal costs are treated as operational company expenses.

However, if there are supporting documents (receipts, tickets), these costs may also be deductible within reasonable limits.

💬 Example:
An employee travels daily to a nearby city to service equipment.

The company can reimburse transport and meal expenses, but without a travel order — these are field service expenses, not business travel expenses.

Question 4: How to record expenses for international business trips?

For foreign trips, special rules apply:

• all expenses are recorded in foreign currency, converted at the NBM rate;
• per diem is paid in the destination country’s currency;
• visa, insurance, and transportation costs are included in travel expenses;
• after returning, the employee submits the expense report in MDL at the converted rate.

💡 We recommend using a separate sub-account for international travel (e.g., 71.1 — domestic, 71.2 — foreign) to simplify control and reporting.

Question 5: What if supporting documents are lost?

If supporting documents are lost, the employee must submit a written explanation and, if possible, duplicates or confirmation letters from service providers.

The accounting department may recognize such expenses:

• in accounting — based on an internal memo,
• for tax purposes — only if at least one official confirmation exists.

Otherwise, the amount will be considered employee income and taxed accordingly.

Intelcont Tip:
To avoid such cases, we recommend implementing an electronic travel and expense reporting system.

Our solutions allow attaching scanned documents and generating automatic reports for tax authorities.

Learn more on the page Accounting Outsourcing in Moldova.

Conclusions and Implementation Steps

Proper accounting of business travel expenses is not just about following formalities — it reflects the company’s transparency, financial discipline, and professionalism.

Errors in documentation, delayed reports, or unjustified expenses can lead to fines and distorted financial data.

That’s why it’s crucial to ensure every business trip is properly recorded, verified, and accurately reflected in the accounts.

Key Takeaways

1. Documentation is fundamental. Without an order, report, and receipts, expenses cannot be recognized.
2. Per diem must be internally approved. It’s a cornerstone of tax compliance.
3. Expense reports are mandatory. They must be submitted within 3 working days after return.
4. Expenses exceeding limits are taxable. Monitor your limits and internal travel policies.
5. Use automation. It saves time and reduces human error.

💡 Even small businesses can implement simple procedures that eliminate manual checks and disorganized paperwork.

Steps to Implement a Travel Accounting System

1. Develop a Business Travel Policy with clear limits, norms, and reporting procedures.
2. Appoint responsible staff for issuing orders, managing advances, and tracking reporting deadlines.
3. Set up a travel register — in Excel, 1C, or CRM.
4. Introduce standard expense report templates and checklists.
5. Conduct regular internal audits — at least once per quarter.

When to Involve Experts

If you want to ensure your business travel accounting fully complies with legal and tax requirements — trust the process to professionals.

Intelcont has over 20 years of experience helping Moldovan companies manage accounting, control taxes, and reduce financial risks.

We handle all travel expense accounting, advance reporting, and documentation with precision and compliance.

📞 Book a consultation at +373 (60) 720 007 and get expert advice on optimizing your company’s accounting and tax management.

Conclusion

Business trips are not only a way to grow your company but also an area of increased attention from tax authorities.

A competent approach to expense accounting helps reduce costs, avoid penalties, and strengthen your company’s reputation.

Take a step toward organized accounting — let every report, every receipt, and every trip work for your business, not against it.