Financially Planning Your Company’s First Business Trip
Travel is often an exciting, albeit stressful, prospect. Vacations and special events like weddings or reunions obviously promise a better time than a business trip, but it’s not necessarily all bad. Business trips offer you the chance to see a different place, shake up your normal routine, and experience something new, even if you do have to work for most of it. Plus, take this as a sign that your business is doing well! If you can afford this trip, then you’re journey into entrepreneurship is clearly a success.
Especially if it’s your first business trip, you might have the jitters. This is understandable, but all you need is some good advice and reliable finances. Planning the financial aspect of traveling can be complicated, but it’s important that you figure it out now. It’s better to establish traveling policy in the early stages of your business than farther down the line.
Word for the Wise
While it’s always a good idea to keep your personal and business finances separate, it’s especially important while you’re on a business trip. The line between personal and professional expenses can get a little blurry here, so making the call isn’t always easy.
However, consider whether each expense contributes to your business’ success. This is usually a good test for which of your credit cards you ought to use. For example, meals during a business trip can be charged on your business card, even though you’re not directly contributing to your business’s success. Your presence in this foreign city contributes to the business’s success, and you have to eat. On the other hand, experiencing tourist attractions likely doesn’t further your business goals, unless you’re a travel agent. Keep this general guideline in mind, and your finances will be straight as an arrow.
Also, keep your receipts! While a credit card will keep a digital record of your purchases, you might not be able to use a card for everything. If that’s the case, it’s doubly important that you hold onto your receipts so you can reconcile those payments afterwards. During every stage of this process, you should always keep this advice in the back of your mind.
First, consider whether taking a plane makes the most sense. A trip to the next state over might not necessitate a plane if you live in Rhode Island, but it might be unavoidable if you live in Hawaii. There are plenty of online travel calculators you can use, but you can also add up the costs by yourself pretty easily. Consider not only the initial cost of the ticket, but the time allotted (flying is typically shorter). While a ticket might be more expensive, business trips tend to be on a tight schedule. You might not have the time to spare for driving.
If you do end up flying, make sure that you’re conscious of which airlines accept any miles on your business credit card. While some credit cards are great for the frequent flyer, not all miles or points are accepted by every airline. Additionally, your flight is probably the most expensive part of the trip, so keep that in mind when charging it. You’ll want to make sure you pay that bill off before interest takes effect.
This is a potentially tricky issue. Obviously, you are there for business, so it should be charged as such, but it means that the business is paying for something usually quite intimate: where you sleep. Things can become awkward though if you are traveling with a business partner. Although 17 percent of employees are fine with sharing a room, that should be something you clear with them beforehand, no matter how much money it would save you.
However, if you’re traveling with family, this is definitely a tricky issue. The flight was already stressful, but this is yet another hurdle you’ve got to overcome. Yes, your hotel room does count as a business expense, because the IRS deems it “ordinary and necessary” If you are ever audited, you could easily explain why that hotel room was not a personal expense. You would need a hotel room whether or not your family came along; however, depending on how many people you’re bringing along, you might have to upgrade. The difference between those two prices ought to be accounted for on your personal card. Using your business card to pay for any additional rooms for your family is definitely crossing the line.
Additionally, do your research beforehand. Use Google Maps to figure out the distance between your hotel and where you’ll be doing business. This can be especially important when figuring out transportation.
Getting from A to B
One advantage of driving to your business destination is that you’d already have an accessible mode of transportation, although this does mean that you’ll have to take responsibility for knowing the area. So either make sure that your data plan supports constant GPS navigation, or go 2008 and print out maps you found online. Some places might have excellent public transportation, something else you should research, but different cities’ transportation networks can feel inaccessible if you’re visiting for a short period of time.
If you flew, however, you won’t have that option available. You can rent a car; you may even be able to get the price discounted through frequent flyer miles, AAA, or just owning a small business. Do some research before you head out, because otherwise you’ll just pick whatever option is closest to your hotel. Additionally, some credit cards offer primary insurance coverage on rented cars, so keep that in mind when credit card shopping. If you are ever in an accident in your rental car, you could possibly sidestep your insurance carrier, which would avoid raising your rates. Check into any other possible benefits your business credit card might offer.
Your other alternatives are taxis or ridesharing programs. Depending on where you are, taxis might have an additional charge for using a credit card, so familiarize yourself with the local custom before you call a taxi service. Barring surge pricing or terrible traffic, ridesharing is almost always a better bet. However, ridesharing platforms usually let you schedule a ride in advance and check the estimated price then.
If you have a ridesharing app already downloaded on your phone, you’ll want to make sure you know whether your business or personal credit card is linked with it beforehand. Otherwise, you might end up paying personally for business travel, or vice versa. If you really want to do your business a service, you’ll pick whichever of these options saves you the most money while still giving you adequate time to attend all business appointments.
After all is said and done, the most stressful part of business trip is usually the expense report at the end. If you’re a small business owner, you might not think it’s necessary, but organizing your finances can save you a huge headache later if you’re audited.
Using a business credit card will help you generate an expense report quickly, instead of going through each purchase manually. As long as you kept your business and personal finances separate during the trip, creating an expense report should actually be the easiest part of your trip. However, it’s still a good idea to save the receipts, just in case!
Your first business trip can be overwhelming at first. There is a lot to plan, research, and pay for. All the same, you need to do your due diligence when it concerns the business. Being responsible with company funds not only displays good judgement but also the ability to think ahead, which are both crucial business skills. You’re obviously performing well enough that your business can afford this trip in the first place. As long as you plan ahead, all you have to focus on is the actual business, and it sounds like you have that part covered.
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Dayton is a chronic Wikipedia addict, which is detrimental to her social life but stellar for her writing. She resides in Boise, ID, surrounded by her own frantic outlines, highlighted encyclopedias, and potatoes. The latter was not by choice.