BYOD: Mixing Personal and Business…Expenses?

Bring-your-own-device (BYOD) policies that allow employees to use their personal mobile devices for work are no longer rare. In fact, Gartner has predicted that by 2017, BYOD will be required by half of all employers.

The devices bring technical challenges, as tech teams need to integrate them with corporate systems and ensure that mobile access doesn’t expose company data to security risks. But the devices’ challenges aren’t limited to the IT department.

Determining how to subsidize employees’ usage of their phones is an ongoing issue for corporate payments departments. Those subsidies can be an important employee perk, but in one report, 54 percent of employees pay for work-related data usage. That percentage is likely to come down, as the law in California and other states now requires employers to reimburse for business-related usage of BYOD devices.

Payments Challenges

Since almost everybody has a mobile phone now, that means almost every employee can potentially require reimbursement for their mobile usage. With the cost of processing an expense report as high as $18, according to Aberdeen Group, streamlining the process around these payments can have a noticeable effect on company budgets.

Additionally, setting guidelines for usage and reimbursement levels can be difficult, as every employee has different work responsibilities and needs for usage of their mobile phone in their personal life as well as professional life. Employees select from a multitude of usage plans, including plans that cover their entire families’ devices.

The bills for mobile devices cover a variety of uses, too: voice, data, text. Separating out business from personal usage isn’t straightforward. In addition to the standard monthly charges, there are potential roaming, excess data, and overage charges. There are also direct carrier billed charges. Those are often used for in-app purchases, but can have legitimate business purposes as well. Direct carrier billing is slowly moving from only digital purchases to purchases in the physical world, such as train tickets.

Payments Strategies

There isn’t one clear solution for bringing these payments under control; every business needs to explore its needs and develop the solution that works best for both the employees and management. Options include:

• Pay the entire BYOD bill. This is the simplest strategy for the company, but potentially the most expensive. Costs can be managed by restricting employees to company-approved plans, but this means employees lose some of the freedom of choice that BYOD is meant to provide.

• Pay a fixed amount or fixed percent. Companies can agree with their employees to offer a fixed monthly subsidy, set either as a flat dollar amount or as a percentage of the plan’s base fee. Companies may need to subsidize different levels of usage depending on the employee’s role and need for a mobile device. This strategy requires updating reimbursement levels whenever employees take on a new position with new responsibilities. There also needs to be an exception handling process for months when the employee has an outsize bill due to additional travel or other legitimate business purposes.

• Track and subsidize actual usage only. Split billing software tracks device usage and allocates the expenses to work or personal categories, but it doesn’t eliminate all the BYOD payment headaches. The usage tracking isn’t 100 percent accurate in categorizing usage; unless calls are made over VoIP, they can’t track voice usage. Split billing also typically requires employees to use a specific carrier, again giving up some of the valued BYOD freedom. Companies and employees need to agree how to pay for the unused portion of their monthly plan. The business may save on employee mobile costs, but gains the expense of the split billing software and reviewing the records.

The one mobile device expense that’s easy to manage is the cost of the hardware itself: in almost all cases, except for non-BYOD, company-provided devices, employees bear the cost of the phone. Beyond that standard, every business will need to evolve its own policy to satisfy its employees, accountants, and regulators.