Client Entertainment Rules for Accounting Firms

However, it's essential to note that the deductibility of client entertainment expenses is subject to specific rules and regulations, which can impact your business's bottom line. For the bigger picture, see our guide to accounting expense management for under $10/user (2026). For a complete overview, see our expense management guide.

Business Meal Requirements for Deductibility

To qualify for deductibility, business meals must meet certain requirements. This documentation must include the amount, date, location, business purpose, and individuals involved.

• The date of the meal: Record the date of the business meal, including the year and month.
• The location: Note the location of the meal, including the name and address of the restaurant or other venue.
• The amount: Record the total cost of the meal, including any tips or other expenses.
• The business purpose: Explain the business purpose of the meal, including the names of the individuals involved and the nature of the business discussion.
• Individuals involved: List the names of all individuals who attended the meal, including their relationship to the business.

Accurate Tracking and Record Keeping for Compliance

Accurate tracking and record keeping are crucial for compliance with client entertainment expense regulations. You should maintain detailed records of all client entertainment expenses, including receipts, invoices, and bank statements. The records should be organized by date, expense type, and client, and should include the following information:

• Date and time of the expense
• Type of expense (meal, entertainment, etc.)
• Amount of the expense
• Client name and contact information
• Business purpose of the expense

You should also keep track of the business relationship with the client and the business purpose of the expense. For example, if you are entertaining a client at a golf outing, you should be able to explain how the outing relates to the client's business and how it will benefit your firm.

It's also a good idea to implement a system for tracking and categorizing expenses, such as using a spreadsheet or a dedicated expense tracking software.