So often meeting professionals are confronted with issues that deal with the master account, but very seldom, if at all, have they put anything in the contract to govern these issues.
For example, all planners should put requirements in their agreements stating that they will be given the opportunity to review the master account on a daily basis, that they can request substantiation for all charges and that they will be given specifics on who authorized each charge.
But before putting these requirements in writing, you need to determine what items can be charged to the master account, who has permission to charge to it and which expenses will not be covered by the host organization. All of this should be spelled out clearly in the contract -- and communicated internally.
Unless yours is a high-end event, such as an all-inclusive incentive trip for top salespeople, incidentals -- and sometimes, as with an association’s convention, the cost of the guest room -- are not charged to the master account; they’re the responsibility of the attendee. Say so in the contract.
Still, your organization might be picking up the tab for board members, speakers and others, so be sure to spell out who will get rooms on your tab. Sometimes, you might put a VIP or two on the complimentary room list; put that in writing, as well.
On more than one occasion we have seen attendees claim their bar bill can be charged to the master account, whether they ordered a drink at the lobby watering hole or took one from the minibar. A contract that specifically disallows such charges will save you a lot of grief.
Master account items for audiovisual, service fees, catering and other ancillary services always should be spelled out in the contract. The agreement also should require that supporting documentation be provided for each charge.
Once on site, planners should take visual account during the event. There’s no need to count coffee cups, but you should have a solid understanding of what is consumed during breaks, meals and receptions to help avoid accounting problems.
When dealing outside the States, be wary of leaving a foreign city before you pay the final bill. On one occasion, a client called late at night, using her last coin, to tell me she had been arrested at the airport because she had not paid the final bill in full. She felt some charges were not correct and had withheld payment until they were resolved.
In light of this, be aware that many event contracts in countries other than the United States require the total satisfaction of all outstanding charges at once, whether contested or not.
My advice to my client was to pay the bill and sort out the details later. However, had the contract allowed her to pay the nondisputed items while waiting for dispute resolution on the others, she would have been on her way home, hassle-free.
Your negotiations and final contract should specify all the information you need to see on your master account. This includes what you require to chart your event’s history.
Such well-defined final bills can provide guidelines for future events. Of key concern, of course, is making sure you have broken out enough information to satisfy your needs.
In the age of Sarbanes-Oxley, you will need these details to justify what was spent and why. Master accounts should provide enough data and backup to satisfy an accountant and, of course, the party paying the bill.
Jonathan T. Howe, Esq.,is a senior partner in the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e-mailed to him at email@example.com.