What To Know About Entertaining Clients

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Entertaining clients has become standard practice for most corporations, whether those clients come to you from around the world, or you travel to them. Businesses tend to understand the value that can come with entertaining clients, including completing deals and fostering stronger relationships. At the same time, it can be tricky to master some of the ins and outs of these scenarios.

There are things to consider such as how to manage technicalities like business expense receipt submission, to what would be considered professional in an out-of-the-office situation.

The following is a general rundown of what to know about entertaining clients in any industry.

Documenting Expenses

While many large corporations do have a good deal of client entertainment and outside meals happening, they might also experience fraud or inefficiency when it comes to documenting expenses. This can be avoided with a modern expense management software solution, which will not just make it easier for employees to keep track of their expenses, but it will also simplify oversight and create visibility and transparency.

If anyone in your organization is responsible for entertaining clients, a comprehensive expense reporting solution should absolutely be in place.

This eliminates the gray area that can come with using company cards, submitting receipts and defining things such as the reason for the meeting.

It’s also important that along with using a software solution, corporations have a well-defined policy in place for managing expenses and entertaining clients.

Keep It On Track

When employees are entertaining, it’s important that they keep the conversation on track with the business at-hand. There are IRS guidelines in place stipulating that entertaining has to be directly related to business.

While this can get really murky, as an employer you have to be firm on this for your own tax-related purposes, and also to make sure you avoid fraud when your employees invite clients for meals.

In general, only 50 percent of an entertainment-based meal is deductible according to the IRS, although this might not always be the case.

Remain Professional

This might seem obvious, but all-too-often employees will start to think entertaining clients is synonymous with party time. They may be drinking too much or be too loose-lipped, and not only can that be problematic for your company’s reputation, but it can distract from the business that’s supposed to be going on, and can lead to even bigger problems for example if your employee starts to become inappropriate.

It’s important that you train employees on how to maintain a strict sense of professionalism so that lines don’t become blurred when they’re out with employees.

Above all else, your goals as a corporation when you have employees responsible for entertaining clients to ensure that a system is set up to prevent fraud and abuse, and also keep costs in check. There should be precisely defined guidelines for spending, and you should encourage employees to stick with policies through the use of expense reporting software. It’s also important that clients are well-trained on what’s appropriate and what isn’t, both regarding spending and reporting, and also behavior when they’re representing your company.

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