Originally Posted by WHBM
I am surprised the original poster is a financial consultant but does not know this is standard in many reimbursable cost areas of the business world.
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Bear in mind also that there is no overt profit on travel costs. If I go to a client I am charged typically at £1,000 a day for my time. That is not just my salary (alas), nor even salary plus direct overheads, but there is a margin in there for my business too. Reimbursable overheads appear on the face of them to offer no margin at all, let alone the risk of the client not paying, capital tied up awaiting payment, etc. Receiving discounts from your supplier is a way of having a margin on the turnover.
If the clients are so concerned about airfare costs let them provide the tickets themselves. Some people do this for consultants. They soon tire of it.
I have been in the business only 6 years, and obviously have no part to play in the expenses, thats what the HR/secretarys do. So dont know why I should have known this is common practice.
I am also charged out at a silly figure (£1760 per day), and this is also substantially over my salary (which is fair enough). But then any expenses (be it food, drink, trains, taxis, flights, jazz mags) are charged back to the client on top. The charge out rate contains all the margins and loadings that my company sees appropriate for it to make its profit criteria, including allowances for risk such as nonpayment. Therefore I dont see why expenses need additional margins to allow for risk. My main point is that we are deliberately charging clients for expenses that we know we are not suffering. The client is not aware (officially) that we are not paying the full cost. Your point regarding margins on expenses would be fine if we were clear that that was what we were doing.