August 30, 2011
Thoughts from captains about how yachts should be funded, in an ideal world. To read the full story on this month's survey about operating costs, click here.
Limited petty cash on month-to-month basis.
I feel the yacht needs to be able to pay as needed and definitely not have to go through a management company but also not have to be sent to the owner’s office so that subcontractors have to wait 30 or more days to be paid. We all expect to be paid immediately for a job done. Why is it that subcontractors have to wait? All things should definitely be discussed and agreed upon prior to doing, since not doing so is the best way for a captain to lose his job.
Whatever way that leaves enough flexibility for me to do my job, and for the boss to be comfortable.
I have a cash account on board of $10,000US for occasional expenses such as dayworkers and tips and other vendors who might not take credit cards.
I wish there was a checking account, or access to petty cash for the occasional item that cannot go on the credit card.
Just like this boat, credit card and cash advances for petty cash sent by check or advances on the credit card. -- O accts mnged by his people
All repairs would be promptly paid.
The captain, chief engineer and chief stew would all have company credit cards and petty cash to fully fund their departments, with a system of monetary threshold permissions. All purchases above that limit would have to be approved by the captain. If the management gets too obstructive, the captain should have an open line to speak directly to the owner to make the case for the expenditure, without any fear of reprisals from the management company.
It would be nice to have a checking/debit account for cash access and to pay small bills.
Current arrangement works well. Funds are requested monthly or bi-monthly, depending on how much cruising and/or maintenance is being performed. Once approved by the owner’s accountant, the yacht’s management company is given approval to release the requested amounts from an escrow account into the yacht’s relevant operating accounts, namely the captain, chef and chief stew accounts.
A credit card and checking account, as some vendors/stores do not take credit cards, then a monthly accounting of all expenses and detail.
Credit/debit card paid by accountant/boss with an option for necessary petty cash advances documented by the captain for cash expenses.
No problems with the present system. Credit cards and boat cash available with a week’s notice to the management company.
I would prefer a credit card dedicated to yacht expenses only.
Negotiated minimum balance for checking account. Owner pays credit card bill; captain pays for all boat-related expenses, and manages payroll for crew.
I prefer to have accounts (checking, credit card, and cash) that I can sign for myself to pay bills. My ideal situation was a job with a credit card that had a limit and a checking account that typically kept about $5,000 in it. When I needed to pay a larger vendor bill, I would call and get authorization and extra funds would be deposited into the account. All of my reporting is done on Quicken and my expenses are accounted for to the penny.
I have a credit card with a limit that is too low if I'm provisioning for the winter in the Bahamas and for yard work. I also have petty cash. I'm terrible with expense reports and have never submitted one. But all the receipts are filed, scanned and in a spreadsheet.
I have found that if the owner is not in financial problems, AND the captain is punctual, accurate and detailed in his monthly accounting report as keeps the owner well informed about larger expenditures due AND lets him know (not at the last moment) when petty cash is due to run out, that captain will probably gain respect from the owner and get the funds he needs.If the owner is financially challenged, that is another story. The situation creates unnecessary stress for the captain and will directly affect the operations and satisfaction of the owner.
A captain most certainly needs to have use of the following:
1. An appropriate credit card (for example: an American Express card in Europe is almost useless so Visa is better)
2. Petty cash replenished as per reasonable and substantiated request upon submission of accounts. This amount usually depends upon the size, owner usage and location of the yacht. For example, if a 120-foot yacht is used bi-weekly with guests onboard locally in Florida and Bahamas for private use, then a consistent petty cash fund would be $3,000-$5,000. If based in the Med, a fund of $5,000-$10,000 euros would be reasonable.
3. Checking account that can be quickly funded. I have used this as a back up and it usually comes from a different account source than the credit card. It helps when a contractor does not take a credit card, when petty cash is needed for owner visits, or when the credit card is not accepted due to owner not replenishing or paying into the account in a timely fashion. I say "when," not "if," because it happens to pretty much every captain I have known.
I like the way it is handled now: no formal budget, I get a credit card, the owner gets and pays all the bills. We consult with each other about expenses. The owner does not want to put a strict budget on the boat as he is afraid some needed repairs might get overlooked. We discuss and consult and it seems to work out fine for both of us.
Through credit card and checking account under my control, with reports monthly.
After some experience with one owner, I was asked to do a winter delivery. I made it clear what was needed, but he didn't even come close. Cash wasn't ready when I needed it, credit card had no available credit line until the day after I needed fuel, which ended up adding 30 percent to the cost. Then two or three times I had to wait to purchase or budget how much fuel to take on and calculate if it would suffice for the next leg of the trip. I’m blessed to have this boat and owner; what a difference. The other is majorly stressful and aggrevating.
I have found that the best method is to, first, have yacht accounts with vendors such as National Marine and B.O.W. that crew members can be signed onto and deleted easily. Secoind, have a company credit card in the captain’s name with a $50,000 monthly limit with the owner’s accountants paying monthly. The captain submits original receipts and itemized lists with explanations for each item. Third, access to the company checkbook and petty cash, with the same itemized system as the credit card receipts.
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