Does your firm have an unfavorable expense policy?

Jun 9, 2015 12:00:00 AM · by David Kushan

As a consultant, you're going to be traveling weekly. Some of the associated costs can be covered up-front by your firm; other costs you'll have to cover yourself and be reimbursed by your firm. 

Ninety percent of the time, the client will reimburse your firm for the expenses incurred for your travel to and from their site. Each client will have guidelines to follow, such as when to purchase airline tickets, a per-diem amount, and possibly a list of preferred hotels or a daily hotel budget. But there’s almost never an issue with all of the necessary expenses being covered by the client, meaning that the consultant or consulting firm rarely has to come out of pocket for any of these expenses.

That said, when I discuss expense policy I’m primarily referring to how things will be paid up-front before eventually being reimbursed to the consultant.

In most cases, the consultant will deal with purchasing their airline tickets, hotel, rental gar, gas, parking, and food with the expectation that they will be reimbursed. Most consultants will pay for these expenses with a credit card and will be reimbursed before the credit card bill is due. In just about all cases, there shouldn’t be any need for a consultant to come out of pocket. If you’re working with a reputable consulting firm, there should never be a time when you’re not reimbursed for your expenses at least every 30 days. Most likely, though, you should receive some sort of expense reimbursement at least twice a month if not sooner.

If you’re not being reimbursed at least once a month, then you’ll be in a position in which you’re coming out of pocket, thus funding your own travel. If this is the case, you should be given an above-average level of compensation for the additional responsibility you’re taking on. 

Some consultants don’t want to deal with any of this. They don’t even want to deal with paying up-front with a credit card and being reimbursed. Well, there are two things to consider here: First, there are going to be some things you’re just going to have to do on your own.  One example is your rental car. It’s very difficult to rent a car without submitting a personal credit card. Can it be done? Yes. Is it a hassle to the point that a consulting firm would realistically consider not hiring you because they’ll have to do this for you? Absolutely. 

Secondly, there are a lot of perks that come from handling these expenses on your own. Paying for these services on a personal account — and using the right credit cards to gain rewards points — is something that most tenured consultants see as a viable bonus to the profession.

The bottom line is if you’re going to be consultant, you should be aware of at least two things in regard to expenses:

1. Each firm has a different policy. So, if you’re dealing with a policy or hear about one that doesn’t sound good to you, keep exploring. You’ll find a firm with a policy that’s right for you.

2. You’re going to have to develop a system for yourself. The better organized you are with handling the necessary receipts and completing your report each week, the less of a burden you’ll feel in dealing with the reimbursement process. Any firm you join should have suggestions regarding whom you can work with to make this weekly process as quick and painless as possible.

General, Consulting, Career Planning, David Kushan


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