re: How Would You Handle? Employee spends too much on company card. But is top producer...

I was scared this was about me until you said top producer.

I wish I had this problem.

I guess you call this rich people problems.

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Is this an ego thing on my end and I should leave this alone or should I talk to him?

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sales guy here that has had good bosses and horrible bosses.

my good managers would just pull me aside, yada yada about having another good month then tell me to reel in my bar tabs on the company card. Not make a big deal about it but put it out there. "skip the app next time" kind of thing

My bad managers would either talk shite behind my back to other sales reps or in a monthly meeting bring it up to embarrass me. "we have some sales reps that think they can spend $250 a night at the steakhouse" kind of thing.

Raise his per diem accordingly to his production, and make a point of it being based on his production and success.

But at the same time, stress the importance of staying within the systems parameters for spending.

Rewarding him with the fruits he has harvested, but also making him abide the company policy.

Production should be awarded, or else he will be unhappy, feeling unappreciated & always looking for better opportunities.

Increase his perks & budget according to his production, easy fix.

Bring him in and thank him for his hard work. Explain to him that because he is your #1 guy, You want to up his daily per dime, but remind him it needs to be for legitimate business expenses in order to insure that it isn’t credited to him as income.

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quote]"Hey man, I don't mind you treating yourself every now and then since you have earned it, but try to keep most of the meals within the per diem limit."

These are the two best responses.

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my response would probably depend on the revenue the guy was bringing in, I have a friend that was a neighbor of mine in FL, entrepreneur, has a global business that has done very well, he has three salesmen that he pays more than he pays himself because the revenues they bring to the company are so huge, obviously they have more latitude when it comes to expense accounts than a lower level employee doing more mundane tasks

Make a concession to him like paying for one hooker per week with the company card. Other than that, he needs to start following company policy. Perhaps this negotiation will keep both morale high and costs relatively low.

This is really a question for your CPA, but this is my 2 cents as a manager of a small business.

If the excess spending isn't impacting your bottom line, then you only expense out the per diem amount. Anything over is a bonus that he should pay income tax on. If you feel that he's spending far more than what should be a "bonus" you have a conversation with him and let him know that you'll need to deduct overages from his salary as personal expenses. Perhaps a lavish meal or two with clients can be justified, but there needs to be consent from you first.

Regardless, you need to have a friendly conversation. Perhaps he believes this high dollar meals are beneficial to the business. If the ends don't justify the means, then you nip that in the bud. After-all, it's business.

Something else to consider is that per diem rates and reimbursement policies can be abused both ways. In graduate school I floated nearly $1,000 a personal card for a work trip that took months for the accounting group to pick apart and settle. Just like a mileage reimbursement for use of a personal vehicle. Does 58 cents a mile really help a person recover fuel and major repairs/depreciation?

I am very wary of employees that openly break rules especially when it pertains to money. What rules are they/will they break when they think no one will notice. He is obviously paying himself what he thinks he is worth. If he is worth more pay him more via bonus, increased commission, spiffs whatever but if you let him pay himself there will come a point where he pays himself in other ways if he isn't already.

I assume As a salesman he’s on some kind of commission?

If so, he is fairly compensated for being the rock star earner he is. Tell everyone that going over the per dime will be automatically docked from their paycheck.

He probably isn’t walking from a good commission for 125 at dinner