Responsible Allowance Budgeting

It is undeniable that an expat needs to live and function comfortably enough to do his very best to represent the company on the international front. However, some companies make the mistake of overdoing the allowances. They have allowances for everything, big and small. Not just the essentials, like food and transport - sometimes even toiletries may be included in the deal!

As such, one of the ways companies can look into for expat package cost control is in the area of allowances. Again, we are not talking about cutting it all away. We are talking about controlling the spending so that it doesn't start a fire that becomes insatiable.

Try to consolidate the allowances. If you have allocated allowances for everything under the sun, you can be sure that the expat will make full use of each and every one of them. The expat - that professional you've thoroughly screened and are trusting to represent the company overseas - you can be sure that he can do some mean budgeting. There's no need to budget for him, really. Consolidate all the allowances into as many logical groups as possible - in fact, one group if at all possible. This lump sum can be his daily or monthly allowance for miscellaneous livelihood expenses. Once that is done, he will be sure to sort the rest out himself.

The other thing that can be recommended is that of deductible expenses. This means, for everything your expat needs to claim under an expense or allowance, while the company will pay for most of it, perhaps up to a certain percentage, the rest will have to be picked up by the expat himself. Once again, this puts the expat in semi-control, and drives home the point that he, too, is responsible for spending wisely - even if it may not be entirely his money. This will be especially beneficial for both parties when it comes to big items, perhaps like furniture. It has been proven time and again that people are always more careful to choose the best of the best, when a bit of their fortune is involved!

Of course, some expenses, like those used for entertaining clients while discussing the signing of a certain deal may or may not fall under such a scheme. It is entirely up to the department managing the externalization project. The things is to be as clear and upfront about this to the expat as possible - before he sets off for his assignment.

And in time, little savings will snowball into big ones!