As a business owner, you are probably aware that travel has become an integral part of success in the business world. Employees must travel across the country or the globe in order to close major deals with serious investors. As a result, travel and entertainment expenses are usually very high on employee expense reports. Because of this, the need to limit the budget for other activities comes into play.
If you’re struggling with travel and entertainment expenses in your business, let’s consider the following information. Using the data from the reports, you should examine where your spending has been. For example, your sales team may account for a lot of your company’s business expenses. However, do these expenses translate to revenue? Are the people who spend the most bringing in the most sales? Are the people who spend the least just unproductive employees? By checking out the information provided on your expense reports, you may be able to spot certain trends that are present within the company.
Create A List Of Allowed Expenses
As a business owner, you need to dictate which travel and entertainment policies will be present within your company. For example:
- Will you allow expenses on low-scale hotel chains, or high-end resorts?
- Will you set a per diem rate?
- Will you allow alcohol?
- First class or business class travel?
- Can anybody pay for entertainment, or just managers and executives?
Another big expense that needs to be addressed is communication. Cell phones are an absolute necessity for the traveling businessmen, especially in today’s world. Aspects of communication such as cell phone bills, data charges, software and Internet charges should all be accounted for in your policies. These are all things you need to consider when developing a format for your expense reports.
Use These Tips To Develop Solid Policies On Your Expense Reports
By having a clear breakdown of what is and what isn’t allowed on expense reports will make enforcing policies a lot easier. Remember that this is your business, so enforcing these rules are necessary for your company to grow. Don’t feel uncomfortable around your employees, especially if they were the ones taking advantage of the previous system. Adapting an expense report software could also be ideal in terms of making new policies easy to enforce. Good luck with your business endeavors!