Making the most of your expense account
Tactics for maximizing your impact per dollar spent
Whoever said there’s no such thing as a free lunch never had a company credit card. While few things compare to spending other peoples’ money, maximizing the utility of this finite resource is a challenge. The cliché that one must spend money to make money offers little guidance as to how an expense account can be used to achieve the greatest return on investment.Dollars can be sales soldiers, which when deployed wisely, can help aid in realizing company-wide strategies. Here are four tactics for stretching your spend:
Be a small fish.
When it comes to money, someone else will always have more. This isn’t a bad thing, so long as you act like a small fish instead of a big one; minnows can swim places whale sharks can’t. Larger competitors with more moola to spend go after “obvious accounts.” They spend money at Mexican restaurants that purchase their Tequila. They drop dough at Michelin-starred restaurants that buy their Champagne. But larger companies can’t spend money everywhere. Dollars spent at small or niche accounts don’t compete for attention in the same way capital expended at the most popular restaurant in the neighborhood does.
Spend less, tip more.
You know what isn’t memorable—that solo diner that had a meal and tipped 22%. If you want to leave an impression, give a 50% tip. That’s not easy to do if you spend $65 on two drinks and some food. It’s very easy if you get one glass of wine at the bar for $16. This method of disbursement requires discipline, but will ultimately find you spending less with greater impact. Plus, this technique finds more money making its way to the wallets of bartenders, servers, and front-of-house staff, the very people responsible for pushing your product.
Don’t forget off-premise.
Business meals are 100% deductible for companies through the end of 2022, so why not pick up some pizza and bring it to a retail customer the next time you taste them on some samples? This is win-win-win; the food will be affordable, you’ll be a hero to the staff, and you’ll smartly focus some of your resources on a significant segment of your customer base. After all, restaurant and bar folk aren’t the only ones who eat. Also, if you can “double dip” by purchasing some decent takeout from a pre-existing restaurant customer and bring that to a retail client, all the better.
Timing is everything.
It’s not just the amount you spend that matters, it’s when you spend it. Smart managers and sales reps know not show up to an account on Fridays at 7PM to show new samples or attempt to get an order. Your company credit card should operate with the same mentality; there are optimal times for outlay. Money spent during slower times and seasons captures greater mindshare. A dollar dropped in January or July carries more weight than two in November. A buck paid during a rainy afternoon lull has more gravity than a few at Thursday night happy hour.
This post makes the assumption that sales reps and managers have expense accounts that can be used legally in the jurisdiction in which they operate. Every state is different when it comes to if and how companies and their employees can spend money at restaurants, bars, and retailers. Don’t chance operating in a “gray area.” A company’s handbook and/or HR department should make clear what is and isn’t acceptable.
If a company isn’t informing its managers and salespeople of the types of measurable goals it hopes to achieve through the deployment of capital (as opposed to effort and time expended), there’s an issue. A reps’ job is to sell as much as possible which isn’t necessarily aligned with the best possible usage of an expense account. If the only guidance a company offers its reps is “use the company’s money as if was your own,” expect them to do exactly that.
This doesn’t mean that large or popular establishments should be ignored when it comes to spending, but just that those spends should come from mid-level or senior management or suppliers.
Like dinner on Valentine’s Day and weekend brunch, happy hour is for food and beverage amateurs.