The Expense Dance
If you are in a corporate job, you always dread that monthly expense report required of you. Otherwise, no expense report, no expense reimbursement and you may be out your own money. Small Business Ownership has a different expense dance.
One of the first conversations I had with my new accountant when starting Illuminate was around travel and expense treatment. Would I be considering ‘write-offs’ or just direct charges to expenses like gas using a credit card or cash? I learned there are benefits to both.
If you have not already had such a conversation with your accountant, do so now. They are the experts and they can provide the correct tax treatment alternatives around mileage, gas, repairs, loans on your car, and insurances. I was surprised how much I learned on this topic.
The one area of this topic I would also focus on is reimbursement from your clients. Some contracts allow and even expect you to include an allotment for travel expenses. Yet, others may simply say the proposals cannot include travel expenses as the ultimate funder, say the State Government, does not pay any travel expenses as a policy. Or you may find a private funder of the project can go with local Consultants where there is no travel expense. In this case, travel expense becomes a competitive disadvantage for you. Additionally, many government clients require that you follow GSA per diem rates for all travel expenses.
Know your options and know them before you bid on a project. The client may be willing to reimburse you for all travel related expenses but may set limits, such as hotel and meal caps. Or they may only pay for hotel and not for mileage or they may simply say we will not pay any travel related charges. And this is why you have a Circle of Trust List of Advisors and why your accountsnt should be at or near the top of that Advisory list.
Be in the know, or the snow like the dancing Barbet in today’s Blog Photo, when it comes to alternatives for travel reimbursement. Their expertise will guide you in the right direction on that all important dance floor
Be well.
