Managing money

Before the introduction of the euro, a journey across Europe involved various currencies and a high percentage of the traveller's subsistence budget was wasted on exorbitant transaction charges and unfavourable exchange rates. Life is easier now for the traveller, and the person in charge of recording expenses, but there are still a few useful tips to note.

By Graeme Payne

currencyThe introduction of the euro definitely made life easier for travel between participating countries, and millions of travellers suggest that the date of the UK's entry to the Eurozone can't come quickly enough!

Look at the main hotel booking systems on the internet and the US dollar and euro are the most quoted currencies, even in countries outside their respective zones. The British pound has been cast off, almost as an also ran.

A company's travel policy should clearly indicate to all travellers and those arranging their trips the exact procedure for the procurement and recording of foreign currency usage.

At the authorisation stage, the anticipated amount to be spent should be recorded and compared with the actual amount on the expense sheet at the end of the trip. Provision should be made for the collection of foreign cash or travellers cheques from the company cashier or bank.

When travelling, receipts should be retained and cash for personal purchases kept totally separate from that of the company. Confusing the two creates many problems and discrepancies rarely work out in the traveller's favour.

currencyThose making regular trips to the USA or Eurozone may find it sensible to hold on to dollars and euros in readiness for the next trip. This saves time and expense by avoiding commission charges and variations between the bank buying and selling rates.

When travelling to countries outside the Eurozone, it's wise to take a supply of US dollars or euros in cash or travellers cheque form. These may be exchanged into local currency as required. In some countries such as Argentina, Israel and South Africa, the exchange rates vary dramatically from one day to the next. It's wise to exchange currencies in small amounts in order to avoid sudden reductions in value.

When recording expenses, it's important to keep a record of the exchange rate for each transaction alongside a receipt. In the event of the need to change money back to the original currency, a proof of the initial exchange may be needed by the bank.

Many currencies, such as those of Pakistan and India, may not be taken out of their country. Checks at security before boarding the plane may result in any notes being confiscated.

creditcardsOne of the most reliable and efficient means of carrying currency is by credit or debit card. Virtually every country has plenty of 'holes in the wall' from which cash may be obtained. The handling charges vary but are rarely as expensive as in the UK. In the USA and Canada, for example, the user can expect to pay a fee equivalent to £1 for each transaction. The exchange rates applied to such withdrawals are more favourable than at a bureau de change.

Beware of exchange offices in popular tourist areas and at some hotels. Many make 'no commission' offers but the exchange rates are rarely in the client's favour, with cash machines offering a better deal.

Again, keep receipts from cash dispensers as these may be used for proof when converting currency back. They will also be requested in the unlikely event of the traveller making an insurance claim.

Remember:
  • Keep a record of all transactions
  • Keep a float of euros and/or US dollars
  • Avoid changing too much currency at once
  • Use credit or debit cards where practical
  • Hold on to exchange receipts

Graeme Payne has trained on travel related subjects in over 60 countries around the world and has worked with hundreds of major companies, airlines and government departments to ensure that they manage their travel effectively. He currently writes for a number of travel magazines in UK and USA and is author of the annual International Luxury Travel Market catalogue.

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