Ingredients for Success

In documenting your expenses.  Catchy title though right?

Don’t roll your eyes, this is one of those often overlooked areas in business – especially since a large number of receipts are sent to us via email these days.  The fact that some of these expenses are possibly limited as a tax deduction also diminishes the urgency behind providing sufficient documentation.  But, it is still essential that you always document your spending in business, no matter how tedious.  And the biggest headache of all is meals and entertainment.

It begins with the basis: Who; What; Where; When; and why.

Who did you eat with?

If you have invested in a simple expense tracking app, then this should be one of those mandatory fields.  Provide the names of the people and their businesses.  If you have a CRM, identify the participants there and add new contact information in they don’t exist.

What did you talk about?

You don’t need to record the meeting but provide your employer (or you if you own the company) with enough information about the meeting to decide if it is something worth pursuing.  If you discussed a sale opportunity or potential prospects, again, update your CRM for this, especially if it is a new opportunity.  Don’t wait until your lunch guest decides to call you.

Where did you discuss business and where did you eat?

Sometimes the meal is the meeting and others the meeting happens before or after.  For instance, I often go to a referral sources office to meet with the entire staff, but my conversation is with, say, their sales manager.  I like to document that we met at their office and then walked to the restaurant and name the restaurant.

When did you have the meeting and lunch?

Day and time of both are important but really it is about tracking how much time you spend in meeting with the other participants.  It is also good to track when you have to explain your day to your boss (or wife as the case may be).  And, it is also helpful in understanding how you use your time: was it a 3 hour meeting about a sales opportunity that never arises?  Is it your 3rd such meeting this month?

Why did you meet and decide to eat?

The why is oftentimes the most important issue to document for your business.  Was it a business opportunity?  Did you meet to discuss their new business line and how you might be able to share its benefits with your referral network?  Was it an intentional lunch meeting or was it because your meeting ran over and you felt it was an appropriate goodwill gesture?  Be clear.  I do many lunches with my referral network simple to stay in contact – especially those who take a clear interest in what we do.  And sometimes, especially with potential customers who could generate substantial fees, if a meeting runs long I think it is appropriate to recognize the value of their time by saying thank you over a burger and fries.

And for those who love the biggest question of all?  How?

How did the meeting and lunch benefit your company?

I love talking with people.  But the reality is, it is often more effective and efficient to have a video chat than to drive to someone’s office and then go to lunch.  It is a cost/benefit analysis which simply begins with you recognizing that your time is extremely valuable.  So, be honest with yourself when you document your lunch meeting by asking how your company benefitted.  Is it a lunch with your top referral source or a lunch with a friend that couldn’t care less what your company does but likes talking about his kids?  I am not saying that having a deep personal relationship isn’t worth it, but be clear that the business benefit is probably not there.

Tax deductibility should not change your overall business approach.  If you make money through lunch meetings I recommend continuing them.  But be ready to analyze how these meetings, and expenses, are working for you and make smart strategic choices that satisfy your needs and also your company’s.  You will be happy by possibly saving money, but more importantly, your very valuable time.


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