Posts belonging to Category Uncategorized



Business Entertainment – Some Do’s and Don’ts

Expense Log

Business entertainment, especially customer dining, is an event that we may take for granted.  It is important for most businesses but always suspect as an expense that can be smartly trimmed in terms of cost, and even frequency.

Business entertainment is a tool that when used wisely can aid in relationship building.  When done correctly, this can result in far greater returns than the business meal or entertainment actually amounts to.

If you desire to claim a business lunch, dinner, or other entertainment, these expenses should be directly related to the business purpose.  The meal or refreshments should be related to the legitimate image business activity, and should be able to stand the test of proof.  Technically, only then would you and your employer be allowed to treat these expenditures as expenses, and not as income when the burden of proof comes along.

Getting Technical

The IRS sets some basic rules that individuals and business follow.  A quick review of the rules that the IRS as set forth will show a couple of rather simple tests:

Directly Related Test

To qualify for reimbursement under the directly-related test for entertainment, including meals, you must be able to prove the following:

  • The main purpose of the combined business and entertainment was the active conduct of business.
  • You did engage in business with the individual during the entertainment period
  • You had more than a general expectation of getting income of some other business benefit at some future time

The Associated Test

If the expenses meet the directly-related test, they may qualify under the associated test.

This test states that entertainment is:

  • Associated with the active conduct of your trade or business and,
  • Directly before or after a substantial business discussion.

This test includes the Substantial Business Discussion rule that is a requirement of deductibility for your employer.

According to Publication 463 – Travel, Entertainment, Gift, and Car Expenses for 2010 from the Internal Revenue Service, “A business discussion will not be considered substantial unless you can show that you actively engaged in the discussion, meeting, negotiation, or other business transaction to get income or some other specific benefit.”

Keeping Credibility

Accuracy and truthfulness are at the heart of professional credibility for the Black sales professional.  Even greater is the fact that only one instance of inaccuracy or untruth can do away with years of work establishing the credibility.  There is more on credibility in the last Black Sales Journal 3/31, Credibility – A Goal of the Black Sales Professional.

I am going to cite some basics, and these are truly basics for expense report integrity.  Here are some suggestions for keeping your standing and credibility intact regarding expenses:

  • Be timely - Submit your expenses no later than 1 week after they are due.
  • Be organized – Keep information in a system that allows you to produce your receipts and expense forms as is necessary.
  • Insure accuracy - If you do your expenses regularly, you will be under no time pressure.  The accuracy in your reports builds confidence.
  • Be honest - Above all, there is truly nothing worthwhile to gain by having your employer pay for a lunch for you and your friend.  It is frankly not worth it!  Only claim what you can prove using receipts.
  • Be Knowledgeable – Know intimately your organization’s expense policy.

Some Business Entertainment Specifics

We all have a particular responsibility when it comes to business entertainment, and especially meals.  We should make sure that the meal or event matches the business purpose.  There should be no instance where entertaining at the most expensive restaurant in town happens for a casual business discussion.  Remember, being modest and practical is prudent and a sign of good judgment.

Here are some basics entertainment do’s and don’ts that you may benefit from:

  • Take Ownership – Forget the roulette that takes place where you the participants of a meal wait for the bill to come, then “wait” each other out to see who will pick up the check.  Unless the customer has advised that they are picking up the meal, they are probably not going to do it.  “Own” the event and then the rest of these strategies will be possible.
  • Wine – If you are the host, only you should order the wine.  You may not realize why if you have never been burned, but the ordering of wine is an extremely high expense at an upscale meal.  If you are unsure you can accept someone’s counsel, yet your job is to order, and replenish the wine.  Feel comfortable stating to the server, or wine steward that you are responsible for the meal, and you will be responsible for the wine.
  • Cordials and Liqueurs – If you open up to your guest having these, you could be in for a surprise.  Once you open that gate, you are hard pressed to control the cost of any one of them.  An aged port could definitely be in range, yet some of these items could be the price of a small pony.
  • Order First – It may seem like bad manners, yet the host ordering first begins to set the tone.  When you order a fairly simple strip or filet, you are sending a message that the ‘market-priced’ lobster, which then attaches itself to a filet to make surf and turf, is probably above the price point.  Now, they may still do it, but the majority of people get the hint.
  • No When to ‘Cut it Off’ – This is always uncomfortable, yet practical.  After the meal, when the laughter and libation goes on, know when to say to the server that you need the check.  That does cut it off…at least for you.  If someone else wants to pick up the tab, it can start there.  This is responsible, and practical.  If it seems like it is wrong, think about the bill you are going to submit, and how management is going to react to it.
  • Tip Correctly – If you tip correctly you will always find those who serve you eager to have your table.  Great service deserves 20% or more.  Good service deserves 15-20%.  I have had some mediocre service at times, yet did believe that 15% was warranted, because of the size of our group.  I cannot ever believe that a tip should be stiffed unless the server was rude, insensitive, and downright awful.  If that were the case, I would be having a conversation with the manager as well.  If you are unwilling to talk to a manager, then stiffing a tip is more retribution than anything else.
  • Treat Wait Staff Properly – When you are entertaining, much can be ascertained about your view on your staff and others by the way you treat the wait staff.  They are not perfect, and you are not either.  I have seen customers make a decision to avoid a formal business relationship with a vendor when that vendor launches aggressively into a server for forgetting something small.  That is about rudeness, and even sometimes about power.

Use Good Sense

It is all about using good sense.  When you do it, the most common mistakes are avoided.  Don’t feel peer pressure, or the pressure that makes people do those things that are regrettable.

Build a relationship with your customers, not a game of one-up.  Be modest when they treat as well.  You will build a relationship with your consistency.

Your comments are welcome.

Being A Mentor – Can You Help Someone Else?

Mentor

There is nothing more rewarding than helping another sales professional reach their dream of having success in reaching their goals.

It is not easy to be a sales professional, so it is really not easy being a Black sales professional attempting to sell in a tough market.  It is actually a real “gut check” because you are dealing with a difficult economy, blurred lines of product differentiation, and in some cases competing distribution systems like the web.

If you are reaching your goals consistently and feeling success, then you need to think about the impact you could have on others.  You need to reckon with the fact that you could make a true difference in the life of a sales professional that might need some guidance.

Two Types of Mentors

The Definition of Mentor -  “A trusted counselor or guide” (Webster’s Online Dictionary).

In Black Sales Journal 1/27 – Do You Need A Mentor? – Actually You Probably Need Two! I suggested that there are two types of mentors that an aspirant sales professional might need.  Of course, someone needs to fill that void.

Below is an excerpt from Black Sales Journal 1/27 describing mentoring for those who might be seeking out a mentor.

Organizational mentor – An organizational mentor is someone who is employed in your organization. This individual walks the same halls and knows the “players” and the “game” in your company. It would be good if he or she has position power (front line manager or middle manager), yet not required.  A deep knowledge of the organization and its’ politics is important.  As with the sales mentor, it would be nice if this individual were Black, yet it is more important that this individual be willing to help regardless of color.

Sales mentor – A sales mentor is someone who has been there.  This individual has prospected, sold, and closed accounts.  He or she has developed a personal sales strategy, failed, repositioned, and succeeded.  This individual’s invaluable knowledge of the sales process and the sales environment will help the Black sales professional in the areas of realistically evaluating his/her sales effort, style, and results.  As a result of pigmentation being a game changer, it would be good if this individual were Black, yet not always possible.

Can You Play One of These Roles?

So for those of you with the skills, knowledge, presence, and willingness to help, which of these roles can you play?  Can you play both?  If you fit both descriptions, you can be both, yet the important thing is to be something more than a colleague to someone.

It is a fact that the role of mentoring does take time and effort, yet it is all well spent.  If there is a sales professional who is a colleague that is working hard to figure out sales, and the organization, and your skills are there, you should step in.  You get an opportunity to help, without any definition of the role, and in the process you hone your skills as a mentor.

With this in mind, I am suggesting that you mentor someone regardless of race or ethnicity.  You will find that when you are asked professional questions, that your answers get better each and every time.  You learn to say, “I don’t know”, and you learn to coach as opposed to provide answers.  You begin to think through things when no one is asking questions, in anticipation of a question being asked at some point.

Your understanding of how to explain the organization and the sales process within the organization becomes generally stronger, and this process gets you ready for a well-defined mentoring opportunity when the time comes that you need to be prepared.

Mentoring a Black Sales Professional

Best of all, when you have the opportunity to mentor someone who has the challenges that you had when you were a fledgling sales representative, you are prepared.  You know not to give all the answers, but to coach.  To allow them to use reason, cogent thought, and sound logistics in coming up with a course of action.  You know that being able to convey an understanding of the organization and the organization’s dynamics is as required as an intimate knowledge of the sales compensation plan.

Too many aspirant sales professionals come in and desire to work the system without understanding why the system exists.  You can do your part in giving frank and enriching conversation to someone new, and give him or her a start.

A Launching Pad for Management

As was discussed in Black Sales Journal 3/24, Are You Sales Management Material? there is no better start than mentoring.  Coaching and training in terms of sales and sales techniques, or even assisting one with their understanding of the organization is a way to be in line for a manager’s position.  There is no better endorsement for the job than to be in good standing on your role, while getting credit for helping others to get results as well.

A Reason Why

Many Black sales professionals quietly leave a job when things are not going right.  What am I saying when I say ‘quietly’?  You will look around and find out that they have left the organization, and no one even knows why.   This happens when someone new feel that all of the cards are a stacked against them.

In most situations the cards are not stacked against you as much as the organization, and the sales process are frankly difficult to understand without help.  Your help can be a career changer for someone in need.

Always remember, the process of mentoring can be done no matter what the color or sex of the individual.  The important thing is to give so that others have a chance.  If you are doing it already, you should be commended.  If not, it is never too late.

Go out there and make a difference