The sales team are often mobile. They will have different clients and customers to meet and could travel to three to four meetings on any given day. These meetings are vital to the sales and growth of your business. It is important that you, as the small business owner, understand what these expenses are and have a proper system in place to track sales expenses and reimburse these expenses effectively.
On one hand, you don’t want to overpay compensation and on the other, you need to ensure that all expenses are properly taken care off. A failure to do so can cause resentment in your salesforce. Here are the factors you must consider when figuring out and to track sales expenses:
1. Know the scope of expenses
To run your business operations efficiently, you must have a clear idea of what the expenses your sales staff encounter and what are the ones you as a business must bear. Expenses can be broadly classified into:
- Travel: Whether your salesperson travels by car or bike in the city where your business is located or if he/she flies for meetings, it is essential that you take care of travel costs. Salespeople typically have their own vehicle or means of transport so here, you need to consider compensating them for the amount spent on fuel or the price of the cab or ticket. When traveling overnight, you are responsible for their hotel and food costs, as well. To reduce these costs, some businesses ensure that only day trips are made.
- Telephone and Internet Charges: In the place of meetings, your sales staff might have calls to further the sales of your business. These calls may not necessarily happen in your office tethered to a landline. They will primarily occur on the salesperson’s mobile phone. You will also need them to send emails and respond to client queries on the go. These costs can be handled in two ways. You can provide them with an office mobile and connection for which you foot the complete bill or you can offer them a stipend as reimbursement, based on usage.
- Client entertainment: As part of interacting with clients, your salesforce might have to take your client to lunch or maybe even an after-work drink. Depending on the type of business you are in, these occasions might be rare or frequent. It is important to remember the relationship your sales team builds with clients is pivotal as it influences how much business they send your way.
2. Create a Budget
Once you have a clear idea of the expenses, the frequency and amounts involved, you can create a budget for your sales team to follow. This will enable you to save on any unnecessary expenditure and also make your sales staff more conscious and conscientious of how much and where they are spending. A budget will give you a clear idea of where you can reduce costs and also how much each lead is actually costing you.
3. Automate the tracking
One of the banes of tracking expenses used to be the manual data entry. This system is riddled with inaccuracies. Bills can get misplaced, counted twice or are often, not properly itemized. This leads to a lot of time and effort being wasted that can be better utilized in more productive ways. With the march of technology, there are now several apps and services that can automate the process to track sales expenses, delivering accurate, real-time reporting for you and easy processes for your sales staff.
Follow these simple guidelines and you will be able to get a clear picture of the costs of your sales operations and deliver on-time reimbursements to your sales staff.