Traveling for clients? 3 tips for business consultants
Traveling for work is part of being a business consultant – you go where your clients need you to go. Between booking flights, staying in hotels, renting cars, and driving, the cost adds up fast. And if you build your travel expenses into your client's bill, there's always the temptation to live a little fatter than you would on your own dime.
But the travel expenses you bill to your client may determine whether or not they ever work with your consultancy again, even if you provide top-caliber work. So how do you draw the line between acceptable and unacceptable travel costs? How can you manage expenses when they come out of your own pocket? Let's take a look at some tips that can help you answer these questions.
1. Use this six-point grid to determine whether you should bill a client for an expense
To manage travel expenses, Firm Consulting recommends thinking about yourself, your firm, the client, and how these things intersect with cost, perception, and value. It offers six pointers:
- Don't spend money on things the job doesn't require.
- If you wouldn't buy it for yourself, don't make your clients buy it for you.
- Make spending choices that line up with the client's values and situation.
- Make choices that are in line with your consultancy's image.
- Don't undercut your own reasonable spending needs just to save the client money.
- Big travel expenses should translate into big value for the client.
For a full rundown of each principle, read the full article.
The main takeaway is to ask yourself what a reasonable person would do in your situation, and then use your best judgment. If your client is expanding their business and has a reputation for lavish outings and expenditures, it may not be out of step to take them up on staying in a five-star hotel.
But if you're helping a client downsize and lay off staff members, it might look really shady and insensitive to run up a big tab at a fancy restaurant.
2. Find ways to make money while you travel
Billing for the time you actually spend traveling can be tricky if you aren't working during transit. If you want to bill for travel time, Consultant Journal suggests taking a look at what the competition is doing so you can charge a competitive rate; doing some preliminary work for the client while you travel so you can hit the ground running; or doing work for other clients while you travel so you can make up for the uncompensated travel time costs.
It's true that your time is valuable and you should be compensated for it fairly. But be sure your client sees that value if you're going to bill them for it.
3. Make sure you're maximizing tax deduction opportunities
You probably know the business travel expenses part of the tax code better than you'd ever thought possible.
You can deduct the cost of:
- Your airfare, mileage, train or bus tickets, tolls, and parking fees
- Transportation fares once you reach your destination
- Meals and tips related to these expenses (you can only deduct half of your business meal costs)
- Dry cleaning and laundry
- Business calls during your trip
- Shipping your baggage or work materials to your temporary work locations
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