I'm looking for a financial term that describes a bank account that's been set up by a company for non-business related expenses; travel, hotels, food, etc. Sort of like petty cash, but it could be large expenses too, so petty cash doesn't really fit. What term, slang or otherwise could be used for an account of this nature?

  • Slush fund, maybe? – Dilip Sarwate Jan 12 '13 at 13:17
  • Yes, that's the term I was looking for. Submit that as an answer and I'll accept it :) – jamesrom Jan 12 '13 at 13:31
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    Why is a company paying for any food/travel, etc, that's not actually company business? Travel is part of normal accounting and if not business related (even if an internal promotion) is fraud, IMHO. – JTP - Apologise to Monica Jan 12 '13 at 16:50
  • @JoeTaxpayer While food, travel, etc on company business is, of course, a business-related expense, there often is the need to do things that are necessary but would be difficult to justify as a business expense. Think, for example, of a prospective client who is being wined and dined and then provided with after-hours entertainment, of which the last might be embarrassing to pay out of company funds.... – Dilip Sarwate Jan 12 '13 at 19:41
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    @Dilip I think you're confusing accounting and taxation. While some expenses may not be tax-deductible, they can definitely be accounted as business expense if the company chooses so. There's a special schedule to reconcile such differences on the business entities tax forms. – littleadv Jan 12 '13 at 23:35

As per OP's request

Slush fund, maybe?

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  • This is the answer I was looking for. The other more in-depth answers did nothing to provide an actual answer to my question (i.e., the term I was looking for). I do not know why your answer has been downvoted. – jamesrom Jan 13 '13 at 2:07

Sometimes a business must keep track of overhead expenses that can be used to determine the rates they will bill their customers especially the government.

When determining the rates they are allowed to charge the government they have to include direct costs and indirect costs. These indirect costs include allowable overhead and G&A. They can also include profit, but the government limits the maximum profit. Any unallowable expenses have to come out of profit.

Unallowable expenses include:

"Costs of amusement, diversions, social activities, and any directly associated costs such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities are unallowable."

When they talk about meals and lodging being unallowable they are referring to those not needed to support the contract. If the contract expects the contractor to travel they will generally provide a travel budget that is separate from the amounts used to determine the hourly rate.

The term slush fund has the connotation of being illegal or hidden. Slush funds are used to bribe officials or are leftover funds that were supposed to be spent, and are now being hidden so that they can be misused at a later date.

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