Chapter 10 Sales Force Expenses and Transportation Our
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Chapter 10 Sales Force Expenses and Transportation Our men give their talent to the company and their genius to their expense accounts. Life Copyright © 2003 by The Mc. Graw-Hill Companies, Inc. All rights reserved.
Factors Influencing Sales Force Expenses Transportation Meals Office supplies Entertainment Expenses Communication Copyright © 2003 by The Mc. Graw-Hill Companies, Inc. All rights reserved. Gifts Lodging
Characteristics of a Sound Expense Plan • No net gain or loss • Equitable treatment • No curtailment of beneficial activities • Simple and economical • Avoidance of disputes • Company control of expenses and elimination of padding Copyright © 2003 by The Mc. Graw-Hill Companies, Inc. All rights reserved.
Salesperson Expense Options Method Reimbursement Advantages Disadvantages Salespeople pay their own expenses None Simple, no costs Reps may not spend enough on customers Unlimited payment plan All legitimate business expenses Flexible and fair, allows for territory differences Encourages excessive spending Limited payment plan Specific amounts Limited and predictable allowed expenses e. g. $80/day - lodging $45/day - food $0. 26/mile - transportation Inflexible Possibility for switching expenses between categories Sales may resent Flat allowance $700 per week Limited and predictable expenses Copyright © 2003 by The Mc. Graw-Hill Companies, Inc. All rights reserved. Inflexible Sales may resent
Factors Influencing Automobile Ownership Decision: Company Owned, Company Leased, or Salesperson Owned Maintenance Special design Size of sales force Control Mileage Operating Investment Administrative problems Copyright © 2003 by The Mc. Graw-Hill Companies, Inc. All rights reserved. Personal preference
Automobile Allowance Plans Method Example Flat amount $400 /month Fixed mileage rate $. 28/mile Graduate mileage rate $. 25/mile, first 15, 000 miles $. 15/mile, second 15, 000 miles Combination flat and mileage rate $200/month + $. 16/mile Copyright © 2003 by The Mc. Graw-Hill Companies, Inc. All rights reserved.
Other Methods of Expense Control • Training and enforcement • Credit cards • Expense bank account • Change in nature of entertainment • Telemarketing • Careful travel planning Copyright © 2003 by The Mc. Graw-Hill Companies, Inc. All rights reserved.