Each day we talk with many companies on the pros and cons of having a corporate cell phone plan versus expensing employee’s cell phone usage. Here are some of the top reasons companies tell us they want to continue to have individual’s expenses phones:
- Belief that costs are lower because expenses are capped. Financial liability is capped to amount expensed i.e. $50, $100, $150
- Employees are responsible for the device. If they break the phone or it gets lost or stolen the employee is responsible to replace it
- They do not have the staff, resources or necessary software to track, monitor, and analyze wireless usage and rate plans, ESN swaps, invoices, and RMA's (return merchandise authorization)
Here are a few caveats with having individual liable plans.
- The employee retains the numbers. You may lose business if an employee leaves the company and goes to work for a competitor with their existing cell phone number.
- Lack of security. What if an employee loses their smartphone with confidential contacts and company documents? How is data protected?
- Could be exposed to a tax liability as the IRS is cracking down on companies expensing personal use for cell phones. Business expense must have supporting documentation.
- Employees expense cap amount but the actual invoice is less.
We could create a list a mile long and debate the rationale for each method but the bottom line is the expense needs to be managed to be controlled and with smartphone adoption and wireless costs increasing by over 30% a year there’s no better time than the present to set a corporate wireless policy.