Staying on top of tour costs

Successful touring – beyond the roar of adoring crowds – often comes down to smart cost management. Read how Centtrip supports the world’s top touring artists.

Tight management of tour costs has never been more important. Music touring has been enjoying a post-pandemic boom, but high costs remain a real issue and staying in control – while empowering the touring party to get things done – is essential.

It’s not simply about profit and loss – although, obviously, that’s critical. Keeping track of ongoing expenses is essential for cash flow forecasting and to ensure you minimise your artists’ ultimate tax bill.

But, once the trucks and coaches get rolling (or the planes take off), tour management and tour accounting become full-on, 24/7 roles. Having an easy and efficient way to track all costs is essential.

In this article, we’ll share some valuable insights and practical advice based on our experience supporting some of the world’s biggest touring artists.

The critical importance of expense tracking

The first step in expense tracking – before anything kicks off – is to have a detailed tour budget. Once you know how much you expect to spend against every expense heading (equipment rental, transport, insurance, catering, accommodation, etc.) then you can manage actual costs against your plan.

Once your artist is on the road, it becomes critical to track costs as they are incurred. A big bag of tattered receipts at the end of the tour is really not helpful.

Why should you track costs in real time?

Managing cash flow – In touring, many vendors need paying up-front while tour income is received over time. Artists need to ensure they have sufficient funds to cover the timing difference between cash outflows and inflows.
Minimising tax – Valid expenses are deducted from gross revenues to arrive at the taxable profit for the tour. If you don’t record expenses, then you can end up paying more tax than you should. If your tour is international, it’s also important to track expenses incurred in each jurisdiction to avoid unnecessary tax costs and cross-border paperwork.
Managing costs – If there’s a problem, you need to know as soon as possible. In recent years, artists have seen many touring costs (including fuel, freight and local labour costs) climbing faster than expected. If you don’t know, you can’t manage. Keeping on top of costs compared to budget lets you know about potential problems as soon as they arise.

Real-time expense tracking supports informed, real-time decision making.

With solutions like the Centtrip platform and multi-currency account you can manage everything from one place. You can send up-front vendor payments, pre-load payment cards for key members of the road crew (in multiple currencies) and, ultimately, receive tour receipts using our currency desk.

“It’s fantastic to be able to buy and manage multiple currencies from one account. We use Centtrip for all our international payments and touring expenses management, saving us significant time and money. And with direct access to live markets we are no longer subjected to any hidden fees.”
Ian McAndrew, Wildlife Entertainment (Arctic Monkeys)

Managing unexpected expenses

No matter how well you plan, something always comes up. Unexpected expenses should be expected, so it’s important to have a contingency in your tour budget to cope with the unexpected.

But it’s not just budget that’s important, it’s the ability to deal with situations as they arise. In touring, when everything is time-critical, you need your people on the ground to be able to deal with whatever comes up. That means having a premium expense card with the highest spend limits in the business so the tour manager can get things sorted without “phoning home”.

With Centtrip you can spend up to £150,000 in a single card transaction and withdraw up to £4,000 daily from 2.1 million ATMs worldwide. You can hold unlimited amounts in up to 15 currencies in a single Centtrip account, transfer up to £200,000 per day between account and cards instantly, and hold up to £350,000, again in 15 different currencies, on each Centtrip prepaid Mastercard.

Centtrip makes it simple to empower your people on the road, while keeping control of costs anywhere in the world.

The daily routine of reconciliation and reporting

Expense reconciliation and reporting are necessary evils if you want to keep on top of tour costs. But, newer expense management solutions, like Centtrip, can make this less of a chore.

Among the most valued features to look for are:

User-defined, real-time reporting – Don’t be limited by restrictive, pre-determined reporting formats and schedules. A good reporting system should enable you to tailor reports to your specific needs and routines: perhaps a daily, per person report for tour managers, a monthly, expense line print-out for artists. You decide.
Receipt capture – Make it simple for cardholders to keep track. Centtrip’s receipt capture function enables cardholders to quickly and easily take a picture of a receipt at the time of transaction. They can add their own notes and the transaction data; images and notes can all be transferred direct to your accounting system.
API integration – Don’t get sucked into the time-wasting and error-prone exercise of re-keying transaction data into your accounting system. API integration enables data to flow seamlessly between systems – card transactions, supplier payments and approvals – ensuring an efficient workflow that frees your back-office professionals to focus on supporting your clients.

Functions like these can reduce stressy hours of reconciliation in a late-night hotel room or tour bus.

The role of expense cards in tour management

In today’s cashless, contactless world, cards are the leading way to pay for ad hoc and in-the-moment expenses. In contrast to cash, cards bring convenience, security and accountability to tour spending.

But not all cards are equal. Based on feedback from our touring clients, here are the key points to consider:

How many cards? When your artist is out on tour, how many cards do you need? One for the main man, the tour manager, might seem sensible, but wouldn’t it be easier to have separate cards for all key personnel, each with their own controls and budget? Some touring companies have also used Centtrip cards for artist and crew per diems. We’ve issued over 300 cards for a single, two-month tour.
Credit or prepaid? A credit card is as open-ended as your credit limit, but with prepaid cards you stay in control and can allocate a budget to each cardholder. With a solution like Centtrip, you can preload (and instantly top-up, lock or unload) cards from your central tour account. That way, all your costs are in one place, but you keep control over who spends what.
Do you need multi-currency cards? If you’re touring across borders, you’ll know that a standard, domestic card incurs foreign transaction fees and, usually, a somewhat unfavourable exchange rate. One solution is to have separate cards for each currency: GBP, euro and US dollar, perhaps. A better solution might be to use multi-currency cards that can transact in a wide range of currencies without additional fees and with fair and transparent exchange rates.
Look for granular, user-level, card-level controls. Another feature that our clients value is the ability to set controls at a card/user level. You can set individual spend limits, alerts and access to features like ATMs for each person. You can also lock and unlock cards instantly, as required. Those are all essential features that keep you in control of on-tour spending and help mitigate risk.

The evolving need for cash on tour

The world may be increasingly cash-free, but it’s not completely there, yet. And, if you tour in different countries, you soon see that cash is a greater requirement in some countries than in others.

Sometimes unexpected costs can only be met with ready cash. One way to cope with cash but still stay on top of costs is to use a local ATM (making sure your card doesn’t levy hefty ATM fees) and draw only the local currency you need. With a solution like Centtrip’s cash manager, the cardholder can keep track of expenses just as easily as card transactions. With the Centtrip card – and subject to the controls you set – a cardholder can withdraw up to £4,000 daily from 2.1 million ATMs worldwide.

Multi-currency management for international touring

Managing multiple currencies for an international tour can be complex. You have up-front costs before you leave (or while you’re on tour in another country), you have on-location costs and then, after the event, you have receipts to bring back home.

Swapping back and fore between different currencies is an expensive option and often the true cost is hidden in bank charges.

A much better way is to create a budget (expenses and receipts) for each currency. Once you know how much currency you need in advance and how much you expect to make on each leg of the tour, you can speak with a currency expert and create a strategy that minimises overall costs while ensuring you have the money you need in the right place at the right time.

“Our clients are leaders in their fields – world-renowned artists and athletes. When we were looking for help with foreign-exchange and international payments we went to a company at the top of their game. Centtrip really stood out to us because they understood our needs and those of our clients, and they offered exactly what was needed and more. Their multi-currency platform enabled us to access live markets, saving money and time.”
Charles Bradbrook, Partner, SRLV