Event organization is an important part of marketing and business development strategy. However, to organize a successful event, managing event costs accurately and effectively is indispensable. A detailed event cost table helps businesses clearly grasp expenses, from venue rental costs, equipment, to personnel costs and other support services.
In this article, Bizzi will give you an overview of event costs, how to accurately account for event costs, and methods for accounting for recruitment costs. Find out now!
1. What are the costs of organizing an event?
Event costs is the total expenditure required to design, implement and complete an event, including from concept, preparation, operation to program completion. Proper planning and management event cost table Help businesses control budgets, optimize efficiency and limit unplanned expenses.
Event costs Usually classified into specific categories as follows:
- Venue Costs: Includes the cost of renting a hall, meeting room, outdoor stage or other event space. Rental price depends on geographical location, area size, usage time and accompanying utilities such as parking, technical support equipment.
- Food & Beverage Costs: Includes costs for tea break, lunch/dinner, drinks for guests and staff. Service formats such as buffet, set menu or finger food will directly impact the budget for this category.
- Event Staff Costs: Including remuneration for MC, PG/PB, receptionist, sound and lighting technician, security and volunteers supporting the event. In addition, if the business has a program to recruit personnel for the event, it is necessary to pay attention to additional instructions. Accounting for recruitment costs into total cost.
- Equipment & Decoration Costs: Includes rental of sound equipment, lighting, LED screen, stage, backdrop, banner, fresh flowers, decorative gifts. Investment in design and construction directly affects the visual experience of attendees.
- Marketing & Communication Costs: Fees for design and printing of publications (invitation cards, banners, standees), online/offline advertising, PR communications, email marketing, social media campaigns to attract attendees.
- Travel & Accommodation Costs: If the event is held outside the province/city, the business needs to consider the cost of airfare, shuttle bus, hotel for speakers, VIP guests and staff participating in the organization.
- Gifts/Souvenirs Costs: Includes the cost of purchasing souvenirs for guests, speakers or partners. This is also a form of scoring points, leaving a good impression of the event.
- Licenses & Insurance Costs: Fees for organizing license (if legally required) and event risk insurance to limit damage when unexpected incidents occur.
- Technology Costs: Includes online registration platform, event application, automatic check-in system, dedicated wifi for attendees and event support technology solutions.
- Contingency Costs: Is the budget reserved for unforeseen events, usually accounting for about 5-10% of the total event cost table, helping businesses stay proactive in all situations.
Classifying each cost group in detail not only helps businesses build a complete and realistic event organization plan, but also creates favorable conditions for clear and transparent cost accounting, thereby improving the effectiveness of budget control and management.
2. Accounting for Event Organization Costs
To manage effectively event costs and ensure transparency in corporate finance, accounting in accordance with accounting regulations is a key factor. This section will provide detailed instructions how to account for event costs, from accounting principles, identifying accounts related to business accounting steps, to help business owners easily control and optimize budgets.
2.1 Accounting Principles When Recording Event Organization Costs
When recording event costs, businesses need to comply with accounting principles to ensure accuracy, transparency and compliance with current financial regulations. Correct application of principles not only helps to honestly reflect the financial situation but also helps businesses control costs effectively, optimize tax benefits and comply with legal regulations. Basic accounting principles to note include:
- Matching Principle: Event organization costs must be recorded in accordance with the revenue or economic benefits that the event brings, ensuring that it accurately reflects the business results of the period.
- Prudence Principle: Record expenses based on a firm estimate, do not recognize potential benefits from events that have not yet occurred.
- Accrual Basis: Costs incurred in connection with an event must be recognized in the relevant accounting period, regardless of the actual timing of payment.
- Validity of documents: All event organization costs must have full valid VAT invoices, economic contracts, acceptance minutes and accompanying payment documents, to be eligible for cost recording and input VAT deduction (if any).
2.2 Determine Event Cost Accounting Account
Depending on the purpose of the organization, the enterprise needs to determine the correct recording account to ensure transparency:
- Selling expenses (Account 641): Applicable when organizing events to boost sales, promote products/services such as exhibitions, customer conferences, new product launches.
- Business management costs (Account 642): Applicable to internal events serving business management such as year-end parties, founding anniversaries, team building programs.
- Prepaid expenses (Account 242): Used when event cost table Costs that are of large value and serve multiple accounting periods, such as a long-term promotional campaign through a series of events, should be gradually allocated to the following period's expenses.
Note: Correctly identifying the nature of an event is key to correct accounting, avoiding errors and tax risks.
2.3 Instructions for Accounting for Common Transactions
In accounting activities, correctly recording transactions is a key factor in accurately recording expenses, ensuring compliance with legal regulations and serving financial management. Below are instructions on how to record some common transactions related to event cost payments and input VAT processing.
When paying/advancing event costs:
- Debit account 641/642/242 (Pre-VAT cost value)
- Debit account 133 (Deductible VAT - if there is a valid invoice)
- Credit account 111/112/331 (Cash/transfer/debt payable to suppliers)
When allocating prepaid expenses (if using account 242):
- Debit account 641/642
- Have account 242
Input VAT handling:
- Input VAT of event organization costs can only be deducted if they serve production and business activities subject to output VAT and have sufficient valid documents.
- Costs related to internal events (e.g. year-end parties) are generally not deductible for input VAT.
2.4 Documents and Certificates Required for Accounting
To account for event costs To comply with regulations and facilitate tax audits and inspections, businesses need to fully prepare:
- Economic contract signed with event service provider.
- Valid VAT invoice according to law.
- Minutes of acceptance and contract liquidation.
- Payment voucher, payment order or non-cash payment document.
- Event organization decision, cost estimate approved by business leaders.
3. Optimize Event Organization Costs
Optimizing event costs plays an important role in helping businesses maintain program quality while ensuring budget balance. To help business owners minimize costs right from the planning stage, below are practical strategies that are easy to apply.
Effective Event Cost Reduction Strategies
Event costs can quickly spiral out of control if not managed properly from the start. Here are some key strategies to help your business run a successful event while keeping your budget as low as possible.
- Plan early: Starting the event planning as early as possible helps businesses proactively choose suppliers, locations, and personnel at preferential prices. In addition, planning in advance event cost table Details will limit unexpected problems.
- Negotiate with suppliers: Always negotiate to get a better price for items such as location, equipment, food service… Some suppliers also have special preferential policies for loyal customers or early booking contracts.
- Choose time and place wisely: Organizing events outside of peak season saves significantly event costs. In addition, prioritizing convenient and easy-to-travel locations will help reduce transportation and accommodation costs.
- Consider the format (offline, online, hybrid): Depending on the program's goals, businesses can flexibly choose the form of organization. For example, online or hybrid events will cut down on many expenses such as renting large venues, food and beverage costs, travel, etc.
- Leverage internal resources: Instead of outsourcing everything, businesses can use internal staff for some jobs such as reception, communications, logistics. This not only saves costs but also increases cohesion within the company.
- Using technology to automate: Applying event management software, automatic check-in system, and online feedback collection helps optimize human resources and reduce operating costs. In addition, technology also helps businesses easily monitor and compare how to account for event costs after the show.
- Measuring and evaluating effectiveness (ROI): After each event, businesses need to analyze the results achieved compared to the costs incurred. This not only helps optimize event cost table in the future but also provide accurate data to serve Accounting for recruitment costs when relevant.
4. Apply Technology to Manage Event Costs Effectively
Effectively managing event costs is not a simple task, especially when businesses still do it manually with many separate invoices and documents. Applying technology to the process of tracking and accounting for event costs helps save time, optimize resources and minimize errors. Below are the challenges businesses often face when managing event costs manually and how Bizzi provides superior solutions to handle them effectively.
4.1 Challenges of Manual Event Expense Management
Manually managing event expenses is often risky and puts a lot of pressure on the accounting department as well as the organizers. As the number of events increases or the organization requirements become more complex, the problems in controlling costs become more serious. Below are common challenges that businesses often face.
- Lost invoices and documents: When organizing multiple events at the same time, storing and managing paper invoices can easily lead to loss, making it difficult to compare and settle costs.
- Difficult to track spending in real time: Payments related to venue rental, equipment, personnel, communications, etc. are often scattered, making it difficult for businesses to grasp an overview of event organization costs in a timely manner.
- Complicated and time-consuming disbursement approval process: Manual steps of requesting, approving, and disbursing expenses prolong the event organization process, affecting the overall progress.
- Errors in data entry and accounting: Manually entering invoice and expense information is prone to errors, leading to discrepancies in the event cost table and affecting the final financial report.
4.2 Solution From Bizzi: Automate Expense Management Process
Bizzi provides effective solutions to optimize the event cost management process, helping businesses easily control their budgets and minimize errors in the accounting process. With the support of technology, cost management operations become faster and more accurate.
- Automatic electronic invoice processing: Bizzi supports data extraction from electronic invoices, automates data entry processes, and minimizes the risk of errors.
- Create and approve online payment requests: The Bizzi platform allows for payment requests to be created for event expenses, approved quickly with just a few clicks, reducing internal processing time.
- Centralized management of expenses: Even if a business organizes multiple events at the same time, Bizzi still helps to centralize all event organization costs into a single system, making it easy to track and control.
- Easily track, reconcile and report expenses: Detailed reports are continuously updated in real time, helping businesses effectively control event budgets and optimize spending decisions.
- Support integration with accounting software: Bizzi connects directly to popular accounting software, automatically accounting for event organization costs, as well as other related costs such as recruitment costs, ensuring data synchronization and accuracy.
Conclude
Properly managing and accounting for event costs not only helps businesses control their budgets effectively, but also improves their ability to forecast and optimize costs for future events. This process not only helps avoid waste, but also helps businesses achieve event goals without incurring unexpected costs.
Applying standard processes in managing event costs along with modern supporting technology such as cost management software will bring many benefits. Businesses can easily track and manage expenses accurately, thereby improving event organization efficiency, minimizing errors and saving time.
Learn more about Bizzi's comprehensive expense management solution and Sign up for a trial/get a consultation to apply tools to help optimize event costs for your business. In addition, you can also Read more related articles about cost management, electronic invoices on Bizzi blog, to improve knowledge and optimize financial processes for businesses.
FAQs – Frequently Asked Questions
Question 1: Are event organization costs deductible when calculating corporate income tax? (Conditions for deduction)
Event organization expenses can be deducted when calculating corporate income tax (CIT) if they are directly related to the production and business activities of the enterprise. Conditions for deduction include:
- Expenses must have valid invoices and documents.
- Expenses must be recorded in the accounting books of the business.
- Event costs must serve the purpose of business development, brand promotion, or building relationships with customers or partners.
Note that if the event is not for business purposes, the expenses may be deductible when calculating corporate income tax.
Question 2: How to allocate event costs that span multiple accounting periods?
For events that span multiple accounting periods, cost allocation should be based on appropriate accounting principles. You can apply the time-proportion method or the relevance of each accounting period.
- If an expense is paid once but affects multiple periods, you need to allocate the expense evenly across the related accounting periods.
- Accounting for costs by each part of the event (e.g. organization costs, promotion costs, venue rental costs, etc.) is also a way to ensure accuracy in financial reporting.
Question 3: What is the difference in accounting for marketing event costs and internal events?
Accounting for marketing events and internal events has differences in purpose and target audience:
- Marketing events: This cost is related to promoting the brand, introducing products or services to customers or partners. Accounting for marketing costs requires clearly defining advertising goals, thereby allocating costs to the right purpose.
- Internal events: These are events such as internal conferences, employee training, awards, etc. Although these costs also need to be accurately accounted for, most of them will be allocated to the business's operating expenses instead of promotional purposes.
Question 4: What should be noted about VAT invoices for event organization costs?
VAT invoice is an important factor in accounting for event organization costs. To ensure validity:
- Invoices must be issued in accordance with the law, clearly stating the name, address and tax identification number of both the seller and the buyer.
- The invoice must fully reflect all costs related to the event, such as venue rental, catering, sound, lighting, etc.
- Ensure VAT invoices have full information on applicable tax rates so that businesses can correctly calculate and declare taxes.
