This link offers some insightful tips about how small business owners can save money while traveling.

One example in particular describes managing car rentals by reserving the smallest, cheapest car available - if they don't have it in stock, the rental agency generally honors the rate with the next best car in stock.

This tip resonates with me because I figured this one out on my own. In NYC the rental agencies move their cars to/from the airport to city locations. Business travelers coming in during the week rent cars at the airport locations, while New Yorkers need cars for weekend travel at city locations. Many times the inventory is a bit of a crap shoot. You can get lucky and get a bigger car for the lower rate.

Enjoy the article!

For more information about travel expense management - take a look at our other blog posts on the subject here! For more information about using the PEX Card Service to budget employee travel, have a look at our demo.

Labels: Budgeting, Travel Expenses

Our last few entries have given you pointers about controlling costs driven by your business travelers. Even if you are only able to get one of the ideas rolling, we know that it will impact your bottom line. So, give it a try.

Another way to help you manage expenses is to use a controlled corporate prepaid card, like PEX Card. What we mean by 'controlled' is that you control where, when, and how much your employees spend. You can limit the amount available on the card, the amount they can spend per day, or restrict the merchant categories where they can make purchases.

Here's an example of how it works:
You have an employee who is headed off on a 3 day business trip. They let you - or your PEX Card Administrator - know they will need $190 per day for lodging, $20 for personal meals, and $200 for client lunches and dinners. That comes to $410 per day or $1,230 for the three days.

Now, you log onto the administrative website, load the card with $1,230 and set the daily limit to $410. You can now restrict their card usage to travel/transportation and restaurants. Everything happens in real-time.

When they return from the business trip you can remove the excess funds from their card, and have a detailed account of all their transactions in one place.

The PEX Card helps you keep your employee driven expenses in check by giving you the tools to predetermine when, where, and how company funds are spent.

If you'd like to see PEX Card in action, click here to see our demo.

Labels: Finance Tips, Travel Expenses

In our past two posts we've discussed expense policy and how to negotiate discounts for your business travelers. Here, we'll talk about client entertainment.

Often most outlandish expenses come from entertaining clients. We've all heard a story or two about somebody ordering a really expensive bottle of wine or dining at the fanciest restaurant in town (with the price tag to match). But, how do you decline to pay those expenses when they won over a new client, or kept an old client from leaving?

I don't think there is an industry which has not been affected by our current financial turmoil. Companies everywhere are tightening their belts, and every department is pitching in to help. Your business travelers should be no different.

Take this time of belt tightening as an opportunity to talk to all of your business travelers. Whether through a PowerPoint presentation, video, or just a chat on the phone - you need to convey that the business needs their help to stay competitive in these tough times. Explain to them that every dollar saved in expenses is like earning $10 more dollars in sales (this is just an example - your numbers may be very different). And, reiterate what's already in your expense policy.

A great way to get your travelers on board is to give them the tools to make it work. The Michelin Guide is an excellent resource. Every restaurant listed has merit, and many are not only yummy and stylish, but inexpensive too. Other favorite places to find great restaurants are zagat.com and opentable.com (they have a new app for the iPhone, which is fantastic).

Client entertainment isn't going away, so you will need to give your team the tools and encouragement to keep it in check.

Labels: Budgeting, Finance Tips, Travel Expenses

In our last post we discussed establishing and enforcing an expense policy. Here we'll look at how to negotiate discounts for travelers.

Most hotel chains, rental car companies and airlines offer discounts negotiated on a company wide basis. This will take some leg work, but will pay off. Here's an example of how to negotiate to get the best deal at hotels.

• Review the last 6 - 12 months of expense reports and determine the top three hotel chains where your employees stayed (be sure to note how many room nights for each hotel).
• Determine where most of your business travel takes your employees and overlay that with a map of each hotel chain.
• Contact your top three hotel chains and talk to them about your needs, your past usage of their hotels versus their competitors (give numbers), and make sure they know that you are going to choose one chain for all of your future business. If you don't have a lot of room nights, don't worry - most will still offer you a discount.
• Once you've collected the bids you'll need to do some online research. Check out travel sites, like travelocity.com or orbitz.com and compare your bid to what is being offered online. Also check out the hotel's own website and look at their special rates and discounts. The bid you received from the hotel should be below what you find online. If it's not, call them and try to talk them down.
• Choose the hotel which offers a good discount (not necessarily the best), but also takes into account their locations and convenience for your business travelers.

Be sure all your business travelers sign up for the hotel's rewards program, and let them know that they can use those rewards points any way they like. This way your employees will be incentivized to use the preferred hotel.

Of course, there will be occasions when the preferred hotel chain does not have a unit near where your business travel takes you. This is where your expense policy comes into play. Make sure that you have a clear policy that states what the procedure is when the preferred hotel is not available.

Negotiating better rates is not only good for business, it's extremely gratifying. So, enjoy!

Labels: Budgeting, Finance Tips, Travel Expenses

They are your face to your customers. They're funny, and nice, and work their tails off to make your company a success. But, man-oh-man can they spend money!

Business travelers can wreak havoc on your budget and drive up your cost of goods sold. Over the next few entries we'll discuss a few easy steps to help you keep spending in check.

If you don't have a written expense policy, write one. If you have an expense policy, and are finding that employees ignore it you need to review it and make changes. One of the easiest ways to make sure your expense policies are adhered to is to have employees sign a document stating that they have read and understand the policy, promise to adhere to it, and recognize if they don't they will face consequences (i.e. non-reimbursement, curtailed travel, reduction in bonus, or even termination).

We have an expense policy template that can get you started or give you a few ideas to improve the one you already have. Click%20here%20to%20download%20the%20expense%20policy%20template.

Labels: Budgeting, Finance Tips, Per Diems, Travel Expenses

Actually, I hear this question a lot. For both the environment and your sanity, streamlining the finance process to minimize paperwork is a must. And yet, there is a definite need for documentation and accountability. The balance can be achieved by careful consideration, adjustment, and evaluation.

First, look at what you can do online. Google docs is a program that lets you access shared excel files that multiple users can contribute to. Online forms are available, which can be filled out, emailed, and stored as a file. This is usually an easier, more convenient option and still allows for accountability. In addition, look into programs that will help make documentation easier. Anything that automates the process or lets you enter data and generate reports can mean fewer headaches and less paperwork. Using corporate cards to pay for expenses can mean all costs are listed in the card statement, which lets you see exactly where and how much is being spent.

Whatever you can move onto the computer into an efficient system will cut down on both actual paper and paperwork.

Labels: Accounting, Finance Tips, Travel Expenses

What do you need to know as you decide on a per diem rate for employees or negotiate a per diem rate with consultants and contractors? It can sometimes seem like a random number pulled from the air, but there a number of per diem rate considerations that you should be aware of.

Federal Rates
As we’ve mentioned here before, the federal per diem rates can play a significant role at tax time. On the plus side, they provide valuable guidelines. That said, it may be easier to work with only one rate, or maybe you don’t feel the federal per diem is adequate. But beware - any amount above the federal standard rate is considered additional compensation, and with that comes all the tax implications of wages.

Receipts
No matter what you decide on per diems, make sure that the actual spending and recuperated funds are accounted for. This is for your own records as well as for the IRS. Without them your system will not be considered an accountable plan, and you and your employee may be getting a tax bill.

Electronic Payments
The big advantage of having a per diem rate instead of reimbursable expenses is that you pay a flat fee and don’t have to worry about all the incidentals. Take it a step further and manage your per diems electronically to improve allocation and recuperation documentation.

Labels: Accounting, Expense Fraud, expense management, IRS, Per Diems, Travel Expenses

During Senator Lieberman’s last election campaign (click here for the article), he went through a reported $380,000 in petty cash. There’s nothing petty about hundreds of thousands of dollars. Where did that money go? While a successful political campaign might be able to just write it off as “petty cash” and move on, no business can function like that. And one quick Google search on “petty cash procedures” shows that no one else does. Lots of time and effort has been spent working on regulating and documenting the money flowing into and out of the petty cash drawer.

Here are some dos and don’ts that can help guide your petty cash system and procedures:

Do make sure that all employees have access to needed incidental funds. Some employees might be in the position to need more petty cash than others, but all employees should know how to access it and be able to take out funds if the need arises.

Don’t put all the responsibility of petty cash on one person. The petty cash system does need a custodian and someone to ensure that everything is working as intended. However, each employee should feel responsible for their petty cash transactions. Encouraging shared responsibility will help foster responsible spending and thorough documentation.

Do decide on a set amount of petty cash. You can re-assess if this was too much or not enough. If you don’t want to deal with how many bills or how much change you need, consider a prepaid card system with a set amount in a bank account.

Don’t let petty cash be used for everything. This fund is really meant for small, immediate purchases. Set limits to what does and doesn’t fit under petty cash. With careful documentation, you should be able to check and see where the petty cash money is going and discourage larger purchases through the petty cash system.

Petty cash doesn’t have to be an undocumented mess, nor does it have to be a complicated burden. It just needs to have a clear purpose and straightforward process.

Labels: Accounting, Budgeting, Petty Cash, Travel Expenses

For any business with a fleet of vehicles, the need for cost management becomes immediately apparent. Fleet spending, particularly due to rising fuel cost, can cause the budget to soar. However, with some careful management, you can cut down on unnecessary costs and increase the efficiency of your operation. Here are some tips on fleet spending management:

• Track fuel usage of your vehicles. If some trucks, buses, or vans are using more fuel, it may be time for maintenance or time to retire an inefficient vehicle.
• If some employees tend to use more gas, consider a training course for gas-efficient driving. A higher gas station bill might also indicate expenses other than fuel, so be sure to set up a way to separate fuel costs from per diem costs.
• Also, when monitoring your fleet, see how much business each of your vehicles produces and consider cutting less profitable routes. Each vehicle you can cut out saves a lot of money. Just cut back carefully and sparingly so that you still have room for growth.

A fleet can be expensive to maintain, but with some careful expenditure tracking, you can streamline the process and determine where costs can be reduced so that your fleet is at its most efficient.

Labels: Budgeting, Travel Expenses

Managing the travel and entertainment aspects of the budget can be a tricky balance between controlling expenditures to keep costs down and empowering employees to make smart decisions. Watching the bottom line at the expense of your employees is never a successful plan, yet it is possible to carefully curtail spending without lowering morale.

• Establishing a per diem is a great way to let employees decide where their travel money goes without negatively impacting finances.
• Having one company way to book travel, whether it’s a particular travel agent or online site, will make it easier to book and pay for travel in a consistent way while still giving employees options.
• Travel is taking employees away from family and friends, so perks like frequent flier miles will be well received, and won’t adversely affect your budget.

According to an article in Microsoft’s small business resource center, "A 2001 Gartner Group study found that just a 5% reduction in operating costs in the expense-management process has the same effect as a 30% increase in sales."

Cutting costs can have a profound effect, as long as you take care to create a balance between greater controls that will decrease spending and employee empowerment to make business travel less of a chore.

Labels: Budgeting, Travel Expenses

While soaring fuel costs are making many companies cut back on travel, there are trips that simply cannot be eliminated. And for these necessary trips, the travel and entertainment budget is often a large chunk of discretionary spending, making it one of the easiest places to cut back. Managing the travel and entertainment expenses can affect the company’s bottom line, so how do you find ways to keep these expenses in check?

Clear travel policy
Set a company travel policy with specific guidelines on how to spend company money while on the road. Then trust in your employees to make smart decisions while traveling. It's easier for employees to make the right choices when they know what is expected of them.

Consistent travel standards
If the company policy is to fly coach, stick to that and have everyone fly coach. Having management travel in a different style than the rest of the company can cause tension and lead to overspending on travel company-wide.

Online booking
Travel agents are a thing of the past for many companies. Discounts are getting easier to find online due to increased competition. Plus, a range of travel options can be presented and approved before expenses are incurred, making sure wise choices are being made.

Report sampling
By auditing a small sample of your expense reports, you can find ways to maximize the benefit of your T&E dollars. These internal audits can help determine the hotel chains and airlines where your company books the most business -- and this data can then be used to negotiate a discount. The audit process can also uncover inconsistencies and target red-flag or rouge spending behaviors that may point to misuse. The goal of the auditors is to help pinpoint places to save money without negatively effecting the employees' perception of travel.

By promoting responsible travel as part of your corporate culture, you can have budget-friendly travel expenses as well as satisfied employees.

Labels: Budgeting, Travel Expenses