Such expenses comprise rent, utility bills, maintenance costs that include landscaping and gardening, and repair expenses such as fixing the plumbing system. You can also refer to them as household expenses because they are the cost of ensuring your house runs smoothly. You should, therefore, ensure that your template has the categories outlined below: He also trains Fortune 500 executives in business-communication skills as an instructor for EF Education.There is no specific rule that we must follow for excellent budgeting there are certain elements that will make any budget template ideal. What other ways, outside of expense methodology, can you limit your business travel costs? Let us know what you think by commenting below.īoston-based Chuck Leddy is an NCMM contributor and a freelance reporter who contributes regularly to The Boston Globe and Harvard Gazette. What works for one middle market company might not work for yours. The key is understanding your own travel needs and the usual costs behind them before implementing one method or the other. Many midmarket companies have a per diem for food, incidentals, and typical travel lodging. When the travel is to a location your people normally don't go or places where costs are higher, you should consider an actual-cost approach. It might be best to employ a per diem approach for normal travel situations, using it to cover food and lodging when you have a clear understanding of the destination. This can lead to discrepancies that take time to investigate and resolve. Your employees will need to be organized in maintaining receipts, and it will take longer for your accounting staff to review travel costs. Using actual expenses for your expense policy is more straightforward, with one notable exception: Because it demands supporting documentation, it may be more time-consuming and labor-intensive in practice. It doesn't eliminate the possibility of fraud, and its reduced documentation requirements may actually make it easier.Such a choice, though, would likely push the salesperson above the per diem. If you send a salesperson to prospect for an important potential client, for example, it might be best for your salesperson to pick up the dinner tab. It may restrict choices that could benefit your business in special cases.This works against the simplicity and predictability of the per diem method. While a decent lunch in one location might be cheap, that same lunch could be double the cost somewhere else, and the same goes for lodging. It's sometimes difficult to establish a fair and realistic per diem for different costs in different locations.It allows more certainty and predictability in travel budgeting.An actual-expenses approach places less pressure on employees. It generally facilitates prudence because it compels employees to make appropriate purchases that won't go over the amount.As long as the cost is under the per diem amount, it's approved without the need for documentation. It simply allots employees the per diem amount,reducing the need for the traveler to save purchase receipts.Next, consider the advantages and disadvantages of using per diem to control expenses. There are advantages and disadvantages to both approaches, and one method might be better used for particular costs (such as having a $50 per diem for food and using actual cost for lodging, especially in high-cost destinations) than the other.īegin by understanding your objectives, client-service expectations and your company's travel necessities. When business travel costs are necessary, what can your midsized company do with its limited budget? All companies use one of two methods: a fixed per diem (for example, $100 per day for lodging and $50 for meals) or actual expenses, which has the business traveler provide receipts to report the actual cost and then request reimbursement. Many companies try virtual means (telephone or video conferences) to interact with clients, but when a business situation is more complex or you're establishing a new relationship, going in person may be the only real option. Because you only want to incur costs that generate profits, reducing business travel is a growing trend. Needless to say, controlling costs and expenses is critical to the success of any middle market business.
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