A Common-Sense Approach to T&E

New York, New York; photo by the author

I love Zoom, but there’s no substitute for face-to-face meetings. People are more focused when they’re in a room together. Executive sponsors show up. You can create bonds that can’t be created otherwise.

The challenge, of course, is that your prospects and customers are geographically distributed—the main reason that travel and entertainment typically accounts for 10% of a company’s total expenses. According to SAP Concur, T&E is also the second-most difficult operating cost to control. So it’s expensive and all over the place; what’s not to like?

Good expense management requires a carefully-written T&E policy and a system like SAP Concur (although I wouldn’t describe myself as a promoter of that particular product). The former because, as Sandler teaches, “You can’t get mad at someone for doing something you didn’t tell them they couldn’t do,” and the latter because processing and reporting on T&E quickly becomes impossible without one.

Even if you have a policy, expense management system, and department-level (or even individual employee-level) T&E budget, employees still struggle to answer the question: Should I make this trip?

Here are three common-sense questions I ask to help employees decide whether or not they should make that trip.

Can You Accomplish Something in Person That You Can’t Accomplish Remotely?

Meet the new executive sponsor of a six-figure customer. A strategic prospect is gathering members of its team from around the world to attend a half-day solution design workshop with you. Your champion is introducing you to a new team. You need to be able to accomplish something in person that you can’t accomplish via video conference.

As with most rules, there are exceptions. The CEO or COO paying a customer a courtesy visit may not have tangible value, but the signal value is immense. Similarly, if you’re going to be in the area anyway, the incremental cost of visiting a customer without good reason is negligible.

What’s the Cost per Prospect/Customer Visit?

For example, a $1,000 trip during which you visit four prospects and customers will cost $250 per visit. Remember to include all costs: airfare, lodging, ground transportation, and meals. I can’t count the number of times the number I’ve been given only includes airfare and lodging, which can easily underestimate the total cost by 25%.

There’s an easy way to make trips more economical: pack in more visits. I like to schedule at least four meetings per day: 9–10 am, 11 am–12 pm, 2–3 pm, and 4–5 pm. Of course, your schedule will depend on what you need to accomplish during each meeting.

What’s the Cost per Day?

For example, a $1,000 trip that spans two days will cost $500 per day.

Again, there’s an easy way to make trips more economical: take fewer of them, but make each one a day or two longer. This requires more advance planning but is well worth it.

The answer to the first question helps to understand if the trip should be taken at all, cost aside. The answers to the second and third questions help to triangulate whether or not the expense is reasonable. In my experience, you know it when you see it. A trip that costs $1,000 per visit is out of the question under most circumstances; so too is a trip that costs $1,000 per day.

At the end of the day, when it comes to T&E there’s no substitute for good judgment. These simple questions help to apply it.

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Chief Customer Officer at Brightflag. I write about issues relevant to and situations faced by SaaS companies as they scale.

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