We're pretty heavy on sales, and the travel, food and entertainment budget always feels a little high, or at least potentially controllable. I've experimented with just setting the guidelines at the Dept of State per-diem, but I'd rather inspire austerity rather than having fixed rules that chafe. Any suggestions?
Travel Food Expenses; control, guidelines
Answers
I've used an "ROI on T&E" analysis in the past for a similar scenario. A quick pivot table from Concur of expenses by sales rep along side sales / sales growth by region provided insights into whose spending was productive and whose was wasteful.
There are survey results that benchmark T&E spend by specific categories. I moderated a
Many businesses Tempt Directors and Managers with a bonus based on a % saving on cost budgets, why not carry this down on to sales people, it gives them a real incentive to not be frivolous with company cash and also a perfectly valid reason to start putting budgets / targets in place for Sales rep spend.
As an added extra they may even start to see why we have these measures in place in the bigger picture!
Good luck
After years of control and guidelines and policies, I have found the best method is "company culture". People do want they believe is acceptable. They stay away from doing what is unacceptable. So T&E spending starts at the top of the organization, e.g. CEO, CXO's, and VPs. They set the tone and examples. If they are buying $300 bottles of wine at dinner, making travel arrangements late in order to do cheap upgrades to the front of the plane, staying in expensive hotels, etc, then the troops believe it is acceptable behavior, and no policy, guideline, whatever is going to change their spending habits.
Now, if executives show moderation in their T&E spending, manage their staff's spending on such items, and not pass the buck to
This is really a
My two cents.
I wholeheartedly agree that company culture is a big driver of behavior in this area of cost control. But, I also think a "bonus"-based program to encourage the right behaviors can be incredibly effective as well.
Just yesterday, I got an inbound
Any program that offers a "win-win" scenario versus hardcore policies is sure to be the best approach (in my opinion).
In a company I previously worked for, we published a scorecard of travel costs as a percent of sales dollars by salesperson by month. Added a little peer pressure.
Basic travel policy applies to sales travel and living. So lowest cost air and biz class hotel requirement keeps that in line. Meal per diem same for sales travelers ($60) unless entertaining clients/prospective clients. No alcohol reimbursable unless entertaining, no restaurant bill greater than $100 per person entertained reimbursed. The sales person can, off course, pick up the difference out of their own pocket. We don't supply company credit cards. Fixed rules don't really chafe if they apply equally to all company employees.
I have never noticed a positive correlation between high entertainment spend and sales results. But to celebrate a closed sale, a bigger splurge is usually OK.
Veering into tangential territory:
We are a public agency - a special district - overseen by local politicians. We purchase the flights and pay for hotel rooms in advance for employee and board member travel. We use the maximum federal per diem rates for ME&I even appropriately prorating for partial day travels.
I say that ME&I allowance should cover everything but the hotel and flight which were prepaid by the organization anyway.
But, some employees also submit reimbursements for things like taxis, mileage to and from the airport, etc. (Don't even get me started on the
And, our CEO is very generous with his corporate card for board members, vendors, etc. on these trips on top of the per diem checks that were already provided. He says his job depends on it.
This is from many perspectives, a clear violation of the public trust to start with. Most of this so called "business travel" is really just an excuse for our board members to take trips to resort areas along with their families and friends and take a vacation while claiming that their limited participation in some "conference" there justifies the business purpose.
But, I say providing anything in addition to the air fare, lodging and ME&I per diem violates the non-accountable plan rules for tax purposes and exposes us to potential tax issues by making all of the T&E expenses part of an accountable plan for which we have not received receipts.. After all, the "I" in ME&E is for "incidentals".
No tax expert, including our own auditors can provide me with a clear cut answer about the ME&I. Although, our auditors are clear that this is junketing by pols on the taxpayer dime and excessive too.
My research into the IRC and regs hasn't provided a firm answer either.
Does anyone have a reference?
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