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BYOD reimbursement: Managing enterprise mobile expenses

A lot of enterprises struggle with the financial side of the bring your own device model, so it's important to develop a smart system for compensating employees.

Bring your own device is one of the most popular enterprise mobile device policies, but cost control is a common issue. Employees expect some compensation for using their personal device at work, and companies should make clear how much of their users' mobile bill they intend to cover -- if any.

With recent advances in mobile device management and enterprise mobility management, IT can now handle most of the data, security and device-provisioning challenges that tend to crop up within a bring your own device (BYOD) policy. That's led many companies to start focusing on the financial challenges inherent to BYOD. Some employees may deserve reimbursement for mobile expenses that were at least partially incurred in the service of organizational goals, but what is fair?

We'll take a look at four common BYOD reimbursement strategies to help you determine the right approach for your enterprise. There are implications of bungling a mobile reimbursement agreement; BYOD is supposed to be a user-friendly device policy, but undercompensating employees for using their own device could squander that goodwill.

Common formulas for BYOD reimbursement

Before getting into the different approaches, it's important to note that companies should carefully spell out their reimbursement structure policies in their overall BYOD policy and/or BYOD agreement.

Fixed amount is by far the easiest approach, and it works just the way it sounds. Approved users receive a fixed amount of compensation, usually on a monthly basis, intended to cover work expenses. An organization will usually try to determine a monthly rate for essentially renting the employee's personally owned hardware. The other ingredient is compensation for a portion of an approved service plan. Typically, a company will pay between 35% and 50% of a user's mobile bill. A fixed amount plan within those parameters usually satisfies all parties involved, but each business has its own happy medium. Overall, most enterprises and employees appreciate the simplicity of the fixed amount approach.

Fixed percentage is a slight deviation from the fixed amount model. This approach pays workers a set percentage of their monthly wireless bill, estimating the average balance between personal and business use. The advantage of this strategy is that it's more adaptable. People have different mobile plans, but with the fixed percentage approach, you maintain a certain level of uniformity. Each employee gets compensated the same percentage, but employees with a larger bill will receive a comparable amount of help to those who may have smaller bills. The drawback of fixed percentage is that it involves more work. Organizations need to verify each user's mobile bill, sometimes on a monthly basis, to know how much to reimburse employees.

Variable percentage addresses the most common gripe with fixed percentage. Inevitably, some employees will feel their percentage of business use is higher than the fixed percentage amount. If you have the resources to pull it off, variable percentage involves the organization reaching individual agreements with users as to what percentage of monthly end-user costs are work related. Many voice and messaging plans are now unlimited, so potential disagreements here will be with respect to data-plan overages. Don't expect an easy resolution there, as data plans are extremely difficult to audit.

Actual use is by far the most involved form of BYOD reimbursement. Some third-party service providers in the telecom expense management field offer the ability to track all usage -- voice, messaging and data -- and assign each usage event as either business or personal. This approach may be too complex for many organizations to keep track of, but it's a good fit for those with a particular need or even legal requirement to audit mobile expenses at this level. It leaves very little doubt as to who spent what on work-related communications.

In general, my consulting firm recommends using the simplest BYOD reimbursement approach possible to minimize opportunities for disagreement. Organizations should carefully review and approve the parameters of any plan, both to reduce overall expenses and to make sure the company isn't vulnerable to excessive reimbursement payments.

Preparing for long-term success

No matter which strategy you choose, you should continue to perform occasional audits for compliance reasons, and also to identify changing patterns of usage over time. Businesses can use that information to help maintain a healthy balance in their BYOD reimbursement policy over the long haul. It's also important to check local, state, federal and even international tax laws to make sure your company is properly recording and reporting reimbursement payments for tax purposes.

Finally, BYOD policies are turning out to be more expensive than many enterprises expected, so it's important to save money where you can. It's a good idea to occasionally reinforce with employees that mobile service charges are like any other corporate expense, and that they should be judicious with their expenses. It's not uncommon for companies to review and approve specific plans, while many larger organizations even negotiate service plan options directly with carriers. Monitoring usage and enforcing less-expensive options such as Wi-Fi, or even landlines when appropriate, can also help limit costs.

It requires some attention to detail, but with a little work you can craft a BYOD reimbursement plan that manages enterprise mobile expenses while also keeping your users productive and happy.

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