In my previous post I wrote about proof of delivery – what is needed to be able to prove and justify expenses properly. I used an example of an event in a hotel which included lunch and coffee breaks. But I did not specifically touch upon food and drink expenses.

In this post I want to look a bit more closely at food and drinks and your administration.

The good news is, accounting for food and drinks can be fairly simple. For instance, if you need to pay for meals and drinks while on a business trip. It is widely accepted that for business trips, travelers can apply a so-called per diem rate (also sometimes referred to as daily subsistence allowance or DSA).

Per diems

The per diem is supposed to cover all expenses while traveling, including food, drinks, local transport costs, and the like (incidentals). In this case, the traveler simply prepares a signed statement that calculates the number of days traveled, multiplies this amount by the per diem rate and results in a total cost. Travel days are corroborated by flight tickets and boarding passes, train tickets or bus tickets, as the case may be. (Proof of delivery is provided by a travel report from the traveler and maybe pictures, event reports, etc.)

Using per diems has as advantage that the traveler does not need to collect and keep all receipts and invoices for meals, local transport etc. during the trip. Depending on the situation, it is not always possible to get all these in the first place. And of course, the person may easily lose a receipt during a longer trip. With a per diem, the traveler can be sure that all costs are covered (and that they do not lose money if they lose a receipt that is subsequently not reimbursed due to lack of proof for instance). For the organization, too, this is an easy way of handling such costs – I clearly remember the scary high piles of receipts and the difficult exchange rate calculations after a multi-country trip in the days when we did not apply a per diem rate. All this, no longer necessary.


Applying a per diem rate requires that your organization develops a policy for this: What is the per diem rate? To whom does it apply? What is included in it? How are days calculated? What are exceptions? Etc.

For instance, an organization applies a per diem of EUR 35 per day traveling or abroad (including in-country business trips that require the person to be away from home), both for staff and for hired experts and trainers. This is built up of EUR 10 for breakfast, EUR 10 for lunch and EUR 10 for dinner plus EUR 5 for other necessities including local transport. This logic implies that:

  1. the departure time on the first travel day and the arrival time on the final travel day are important to assess whether a full EUR 35 rate applies to those days or not.
  2. In case the activity or a third party pays for a meal, this should be deducted from the per diem rate of that day.

To make this less complicated than it sounds, this organization has developed a simple excel form that helps the traveler calculate the total amount of per diem applicable. Not included in this per diem is transport to and from the airport, which can be reimbursed on the basis of an invoice. Accommodation is also reimbursed separately, governed by certain rules. If the traveler pays for a joint dinner for a group, the traveler can claim this separately, based on an invoice. The per diem calculation shows the dinner as paid for by another party, and the invoice for the dinner is reimbursed as a separate cost as part of an expense claim form.

Check your funder’s requirements

However, do check the conditions of the project funder before reimbursing such invoices. Some funders do not consider alcohol an eligible cost. Therefore, if the restaurant invoice includes alcohol, the cost of these beverages cannot be charged to the project. If you know in advance that you will organize dinners with such project funds, you can inform your participants beforehand that alcoholic drinks shall be paid by themselves and shall not be part of the shared invoice. That way, participants can make an informed choice of what they want to drink and pay for themselves.


The per diem rate I mention above, EUR 35 per day, is a real one that works out well in practice. The practice of this organization includes travel all over the world, to bigger cities as well as smaller places, in the West, East, North and South. It is up to your organization to decide what is a good rate for the organization, in line with its standards, the countries the team travels to and donor requirements.

Most funders publish per diem rates that are applied by their government. These are therefore based on government travel standards and include cost of accommodation, too. Here you can find the EU rates and the US rates.

One not-for-profit I know decided to apply the US rates at 70% of the amounts listed in order to be in line with the sector. This made sense for them because they received a lot of US funding.

Another not-for-profit developed a policy based on the UN rates. You can find their full travel policy for external hires, including arrangements for per diems, here. As you see (under item 4, on page 7), this organization applies a system of percentages to deduct amounts from the daily rate in case some of the expenses incurred are paid for by other means or parties.

Over to you!

As you see, it does not need to be overly complicated to develop a policy for per diems. You just need to look carefully at the activities you deploy, and the locations where you run your activities, check if your funder has specific requirements, think of rules that make sense and are fair and write this all down in a comprehensible manner (OK, this is a simplified summary).

The challenge is of course, as always, in consistent implementation. For this, my key recommendation is: Make it as easy as possible for your team to comply, by for instance making excel sheets that can facilitate calculations. And, make sure your team understands the reason why the policy and the rules are there, and why compliance is key to the well-being of the organization as a whole. As you know, my motto is Finance is for Everyone. I believe everyone in the organization, no matter what their position, has a role in maintaining healthy finances as a key asset in the resilience of your not-for-profit on its way to achieving its mission. And yes, managing expenses for food and drink properly is a part of that, too.

PS if you are interested in an excel template for per diem calculations, drop me a note!