EXPENSES

There are other costs that will come under the heading of expenses, and for which the client will need to budget. Value added tax (VAT) may need to be added to the bill. This is a matter of little contention when the client is subject to VAT, but will represent a real additional cost if the client cannot set it against the VAT on their own business outputs (as with some government departments).

There may be bought-in resources needed to carry out the assignment. These can include:

• specialist equipment;

• software;

• specialist advice or subcontractors;

• purchase of licences.

The need for these will depend on the nature of the assignment. On most assignments, however, travel, subsistence and accommodation expenses will be incurred. When an assignment entails travel to a number of locations, particularly if long distances and overnight accommodation are involved, these can quickly mount up.

Consultancy practices usually have rules governing travel costs (mileage rate for cars, class of travel by train or plane, use of taxis and hired cars), accommodation (grade of hotel) and subsistence (for example, a daily rate). These can provide the basis for estimating the likely expenses under this heading. For example, in the week that I write, I have just had to arrange a short interview programme with a client, which involves travel to locations in London, Bristol and Manchester, and we have agreed a budget as follows:

• London: no charge as close to head office;

• Bristol: travel by car, at an agreed mileage rate;

• Manchester: travel to Heathrow by car; shuttle by air to Manchester; taxi to Manchester centre, and return.

Although this is a trivial example, estimates of expenses on larger jobs can be built up in a similar way. It is worth establishing what the client's rules are for their own employees incurring expenses. For example, a client may baulk at paying for business class flights for consultants when the rules for their own staff state economy.

There may be other expenses related to in-house costs, such as typing or printing. For the treatment of these, see below under 'Non-time-related charges'.