I walked past Stacy’s desk the other
day and there she was, in the middle of her expense reports. She does her expense reporting at the end of
every month. We avoid Stacy at the end
of every month because expense report day stresses her out; WAY out! Her stress frustrates me because I know I
could “fix it!” Here are Ken’s easy
steps to make expense reporting a breeze:
1. Use one credit card for
expenses and another personal credit card for purchases that are not reimbursable
by your company. This seems like a simple rule, but it’s red for a reason…
it’s the Cardinal
rule! You’ll be tempted occasionally to
buy small personal items on the card you use for business; don’t do it. Let’s walk through an example. Any given billing cycle for a credit card will
include charges you incurred but may not have used yet. If you buy a plane ticket three weeks in
advance of your trip, you may get billed for it prior to doing your expense
report and getting reimbursed for it.
Therefore, as billing cycles go by, you’ll pay the amounts reimbursed to
you from your company, and that amount will rarely match your credit card
bill. Since the reimbursed money you’re
paying back doesn’t include the personal items you purchased, it is up to you
to track and to remember to pay for them out of your own personal
account/pocket. Nobody can remember to
do this so ultimately, six months from now when the stars have aligned and your
expense reimbursements finally line up with your credit balance, instead of a
“0” balance, there’s $118.50 that you can’t find! Now, like Stacy, you’re freaking out at your
desk looking for receipts that probably don’t exist.
2. Work with the bank that issued your
credit card to get your balance on that card raised as high as possible. Call them and inform them that you intend to
use the card exclusively for business travel.
You may want to wait a few months until you have some evidentiary history
they can look at. Hotels place a “hold”
against your card for the amount they believe you intend to spend. So when you check in the first day for a week’s
reservation, the hotel will reserve a “credit hold” in the amount of $1,500 or
so. A large balance will give you room
to buy some airline tickets, absorb a hotel hold, and still have enough credit
to buy your client dinner, etc.
3. As soon as you get your expense
reimbursement check (I took the steps to have it directly deposited to an
account I can access online), make a payment in that exact amount to the credit
card that you use to travel with. Don’t
wait for the bill to arrive; you need to keep the balance on that card as low
as possible so that you can book more hotel reservations, etc.
Tune in next Monday for more tips on
Corporate vs. Personal credit cards on travel!
EXTRA: If you have questions for Ken regarding
business travel, hotels, airplanes, etc, please send an
email! Your questions will be recorded and Ken will answer the
best ones in his Ask the
Expert podcast show