Dealing with traveling expenses in a budget?

How do you approach travel expenses for a production (airline, hotel, car)? If you give a complete budget that includes rough travel estimate, and spend a little less after its done, do you refund that money or does it just go back into the budget?

The way I was taught, and this has worked for three decades is:

When bidding, try to avoid estimating the four categories of travel or list as Additional Anticipated Expenses to Be Billed Separately at Cost.

These four areas have incredible variables, such as how far in advance you book the tickets, unanticipated staying at super expensive airport hotels, etc. So I always break Air Travel, Lodging, Meals and Rental Cars as an "additional expense" that will NOT BE MARKED UP. The only category you can possibly come close with is the rental vehicle, the three others are total wild cards. To cover yourself you'd have to bid wildly high, and even if you rebate the surplus like Nick does, your initial bid will look incredibly high.

With the excess baggage factor you have no idea what it will cost, and you never know what kinds of restaurants you'll find yourself using (per diems are never enough). For instance: at meals you may be treating several people you didn't expect to be there and you don't want to appear impolite. So if at all possible tell the client that the 4 categories of travel will be IN ADDITION. If they say they need an "idea or ballpark" then you have to dedicate the two hours to estimate it.

Lastly, since all these items will be on my credit card I insist on that portion of the budget to be upfront, no waiting for payment. Unless it's a longtime client or Fortune 500 company.

Well, that's my .02¢. Worked thus far.

Ned Miller
Chicago Videographer
http://www.nedmiller.com
http://www.bizvideo.com

I try to get 50% of the budget (non-travel) up front. When we're done with the production portion and I have all my travel receipts in, I then bill the travel portion and ask for "fast track" or asap payment. This way I am not waiting for the completion of the video and waiting for the 2nd half + travel. As everyone in the biz knows, the definition of "complete" is vague and can take weeks, but I need the travel money paid quickly because it's on my credit card. An alternative option is if you can travel with the client, everything related to travel is put on their credit card, but this assumes they are always with you.

I am more forgiving of Fortune 100s and steady clients than I am of new clients.However, some mega size clients have to abide by their internal accounting rules and I have to tack on the travel to the 2nd payment. I always include the travel receipts though.

But getting back to the point I was making in the post: No matter how carefully I estimate, the four categories of travel are so variable. In the good old days I would slip a skycap $20-$50 tip and take on everything, now I may be charged hundreds for overweight and excess bags. Besides, it varies from airline to airline. So if at all possible I get permission to do all the non-travel part of the estimate (but include your travel only days), and the four categories of travel (Airfare, Meals, Lodging, Car Rental) will be billed "In Addition at Cost". I usually include a line that I will travel reasonably, meaning a Marriott Courtyard versus the downtown Hyatt, etc.

It also depends if you are doing an estimate as a videographer or a full service production company. It is expected that a cameraman is reimbursed for travel very quickly by the producer who has supposedly his 50% up front to pay the shooter.

There have been a few times when they needed an exact travel estimate because they wanted to compare using me against a local video production company, so they needed the travel costs to compare apples to apples.

Ned

P.S. When estimating always take out all the rental car insurance you can. If you get in a bad accident your carrier might not cover you unless you had a business policy, and you can't look to the client's company because their legal department may cut you loose as a "contractor". Verbal agreements mean nothing, so take the insurance. When asking for hotel rates get the bottom line. Here in Chicago a $200 room really means a $270 room when all the taxes and fees (tourist gouging) are added on.

Ned Miller
Chicago Videographer
http://www.nedmiller.com
http://www.bizvideo.com