John's new job requires him to pay for company expenses out of his own pocket. He will be reimbursed each month, but John doesn't like this way of doing business. Dave offers some advice, and gives his take on how company expenses should be handled.Show Transcript
QUESTION: John recently took a job that requires expenses of $5,000 a month. His company told him to get a credit card to cover things, and that he would be reimbursed, but John is trying to get out of debt and doesn’t like the idea. He asks Dave what he should do.
ANSWER: When you talk about the cost of doing business, it’s the responsibility of the company, not the employee, to pay expenses. If I send someone on the road to make money for my company, I pay the bills. It doesn’t matter if you’re talking about hotel rooms, airfare, or rental cars, those are my expenses. If it’s someone who travels a lot, we give them a company debit card. If it’s just an occasional thing, we’ll give them money out of petty cash.
It’s a mystery to me how some segments of corporate America have sold their employees on the idea of being the company bank. Ultimately, the decision is yours. If you don’t mind covering your company’s expenses and getting reimbursed, but you don’t want to go into debt, you’ll have to save and build up a $5,000 business expense fund. This fund should be in a separate checking account, and it should be used only for business expenses. Anything that’s spent from this account should be replaced immediately when they reimburse you.
Personally, I think this is an unprofessional way to run a business. But if you like your job, and want to stay without taking on any more debt, the good news is you’ll only have to fill up your expense account one time.