As travel fares climb up to extraordinary heights and the economy still suffers, your company might be faced with a difficult decision regarding expenses on travel and entertainment. You might be forced to limit the amount of spending on various aspects of travel. However, in order to determine if this is necessary, you as a business owner must go over your company’s expense reports.
Does Spending Correspond To Revenue?
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.
What Expenses Are Allowed?
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.
Having a firm travel policy set in place will be the best way to avoid any type of controversy. By having a clear breakdown of what is allowed and what isn’t will save you and your staff a lot of headaches down the road. As mentioned before, go over your previous expense reports and see what can be done in order to maximize profit and create happy employees.