SpeakerNet News Compilations
Including Expenses in Fees
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My question was: Do you charge separately for expenses, or do you just quote a higher fee and pay your own expenses? I usually book my own hotels and flights and charge separately for expenses. However, recording receipts in an invoice is tedious, and I'm not convinced that clients wouldn't rather pay a lump sum. On the other hand, if air fares change, clients shift times/dates, or I underestimate expenses in a foreign city, I could end up significantly out of pocket. Your thoughts on wise/best practice, please!
-- Rebecca Morgan
There are good and bad parts to both ways of doing expenses, as you say. Here in the states, in addition to the bookkeeping hassle you state, if you do all inclusive, you can only deduct 50% of your business meals. Now that may not sound like a big deal, and for some the offset of the ease of doing business with an all-inclusive fee counters this annoyance. But for some, that 50% non-deductable expense adds up significantly.
-- George Walther
I've done a flat $1000 for years, with never a squawk. I include this on my site (text below) and provide a very thorough explanation, too.
Inclusive Travel Fee: $1000
All engagements requiring travel from Seattle to any destination in the continental US benefit from a flat $1000 travel fee that includes air transportation, meals, local arrangements, airport parking, and all incidentals. Hotel room and tax should be billed to your master account and there is no itemized travel expense report to deal with.
I also include a complete explanation with the contract:Explanation of George Walther's "Travel Fee" Policy
For all speaking engagements that require travel from my home in Seattle to any destination in the continental US, I charge an all-inclusive, flat $1000 travel fee. Sometimes, clients wonder what it includes and have questions about the basis for this fee.
The purpose of this page is to answer your questions, and I invite you to let me know if there's anything further that you need from me.
The primary reason I converted from traditional itemized expense reports to the flat fee several years ago is to provide simplicity and predictability for my clients and to reduce dreaded paperwork for myself. You may have been unpleasantly "surprised" by employees' or vendors' expense reports in the past. They sometimes include curious charges that you have not authorized, or that you find to be unreasonable. This never happens with my flat fee policy. You know exactly what my travel expenses will be well in advance, and have a single invoice to process with no untidy receipts to track.
I have chosen to be a "one-man-show" with one excellent part-time assistant to help with my correspondence and other office functions. I despise paperwork, and flat-out refuse to collect and log receipts for parking, taxis, plane tickets, etc. Instead, I simply charge all of my miscellaneous travel expenses to my company credit card, and declare your travel fee check to the IRS as earned income.
The $1000 fee includes: Transportation from my office to the airport, parking while there, air transportation, en route meals and miscellaneous expenses, destination transportation, phone calls while traveling, expenses for my daughter if she travels with me, childcare costs if she stays home, champagne and caviar if I feel wild, courier services, etc. In other words, all expenses that result from my having to leave home, with the exception of my hotel room and tax, which I ask you to have direct billed to your account.
This travel fee is not an airfare charge, though it includes airfare. I fly first class 90% of the time, but do not ask you to process an invoice showing first class airfare, which nearly always (and often outrageously) exceeds $1000. I may use an airline certificate, or purchase upgrades, or combine my plane ticket with other necessary flights.
Because this fee is inclusive of, but not limited to, actual out-of-pocket expenses, no receipts will be provided. Some trips cost me less than $1000, others cost way more. The $1000 is an estimate of the average costs for a speaking engagement journey.
If you have any unanswered questions about my travel fee policy, I welcome the opportunity to address them.
George R. Walther
-- Dana Bristol-Smith
I charge separately for expenses and include receipts with my invoices. I wouldn't want to do a lump sum fee inclusive of expenses because I wouldn't want to get stuck paying extra and not getting reimbursed. You've got to itemize your expenses for tax purposes anyway, so it's really not much extra work. It's possible your clients may be using money from different budgets for fees and expenses. On proposals I include fees and say additional expenses include travel, air/ground, lodging and meals.
You mention that your not sure which your clients would prefer. In that case, I'd ask them directly.
-- Burt Dubin
In the late 1980s I went flat rate and never looked back. Meeting planners love it.
-- Michele Rubino
As a speakers bureau agent, I like it when speakers have all-inclusive fees because I can let my clients know up front the total cost for the speaker. The way many speakers seem to be formatting their inclusive fees is this:
Regular speaking fee
+ a flat "travel fee" (which covers airfare, ground transportation in your home city, parking)
+ ground transportation in venue city and hotel, booked directly by the client and direct-billed to their account
Often speakers will have varying flat travel fees depending on where the event is taking place. For example, if you were based in CA, then maybe your flat travel fee for west coast events is $250, for Mid West $350, and for East coast $500. (Not sure if you require first class expenses, but I'm basing this example on approx. costs for coach class airfare.)
Yes, you may lose a bit of money once in awhile, but you might also gain some here and there, so it pretty much evens out over time. It's nice not to have to send an expense invoice to the client after the event and it will save you an extra accounting step.
-- Marian Madonia
I give my clients the option of my fee, or a travel all-inclusive for $X more (assuming a one day event). The inclusive is for air, shuttle, rental car, meals and incidentals. I ask them to book my hotel separately and to have it direct billed to their account. I calculated what my expenses were divided by the number of clients I had that year to come up with the fee that I charge. Sometimes I'm ahead, sometimes I'm behind. Overall, I'm even. I'm not looking to make extra money this way, I'm just looking to have ease of invoicing. It's worth it to not have the extra paperwork and my clients like that their expenses are controllable (ie, they know in advance what they will be paying and that there are no surprises).
-- John Haskell
I find that having my fee include all expenses is tremendously beneficial.
- I don't have to create an invoice, back up copies of all charges, etc.
- I don't have to wait for expenses to be paid.
- I sell at a relatively high price for some of my programs. By saying I pay all of my own expenses, you get the meeting room, provide ground transportation and meals, I let them know that they are getting a turn-key deal.
- I don't have to worry about indulging myself with limos or better hotel rooms or suites...I'm paying.
-- John Madden
In eight years of speaking I've only sent out about half a dozen invoices for additional expenses. Like many speakers, I ask for half the air fare along with the 50% fee deposit, when the booking is made -- and for the balance when I actually speak. I ask them (in the contract) to bill the hotel directly for the room.
Beyond those major costs, there might be an evening meal and a breakfast if I'm not joining the group at their reception or continental-type breakfast. I don't usually bill them for that; I figure there's enough cushion in the fee to manage those small expenses. And the client is less encumbered with paperwork and additional payments.
-- Laura Benjamin
I usually ask my clients what their preference would be and then act accordingly. I don't do too much work anymore with "one shot" programs, so these are folks I work with on a regular basis. Over time, it has become a non-issue because I now know their preferences. However, in the past, I saw tremendous value in going the flat rate approach because of the benefits you mentioned. I just make sure to charge fairly on my consulting/speaking fees so that if expenses do change, I'm not taking a major hit. An exception to this are my government/military clients who are bound by purchasing rules that require they reimburse for expenses and "per diem" subsistence rates.
-- Patrick Lee
I do an "in between" that seems to work well. I limit my expenses to airfare, ground transportation & hotel. I cover all meals incidentals, etc.
- They expect to pay airfare, and you have no way of knowing whether it will be $200 or $800.
- Hotels often comp some rooms to the organization, and you might end up in one of those, w/ no cost to your host.
- Even if the hotel does charge, my contract says the hotel is to be billed to the sponsor. When I get there, it almost always shows up as a direct bill to the host, so I'm never involved.
- I added ground transportation when I got stuck w/ $100 in cab fares in Chicago a couple years ago. Most shuttles to most major hotels will run around $30. I don't mind eating that, but I'm now including it as an expense. I have the info to know the shuttle cost in advance.
Usually, I fly out of a small airport just 6 miles from my home. If I have to drive to St. Louis or Kansas City, equidistant for me, I will include mileage or the van shuttle fee as an expense. I know those costs.
I just booked 2 days in a small town in North Dakota. I asked if they would provide a vehicle or driver. No to both, so I rented a car, their expense.
- I book my own airfare after I've received my 50% deposit from the client, so I know that cost.
Once I know all my costs, always several weeks in advance, I fax them an invoice for the full fee, all the expenses they're responsible for, less their deposit, showing a balance due. I also fax them the receipt from American or Orbitz and documentation on ground travel charges. More often then not, they have a check for me at the event, which my contract calls for. Even if they don't have the check, usually because their procedures won't allow it, it arrives within several weeks. Either way, there's no need for me to be collecting receipts and sending a second bill for expenses.
-- Lenny Laskowski
I used to send my clients an invoice for my actual expenses after the event and wait for a second payment. I switched a few years ago to requiring the client to pay for my airfare and hotel directly. I do not get involved in any of the billing and this allows them to take advantage of what arrangements they have with the hotels.
As far as meals are concerned, I pay for them and rarely charge for my meals. I figure I have to eat anyway, even when I am home. I do not go crazy with fancy restaurants. Many times, my client offers to take me out to dinner the night before and they end up picking up the tab anyway.