There may be significant project expenses associated with developing your project, including prototyping and market research expenses. Your company client is aware of this. All decisions about what costs to incur must be made in consultation with the primary company contact and must be approved by the company. Each decision is made based on analysis of the cost and benefits. The scope of approved costs will depend on the company and the project. A large company may pay $12,000 for a professional focus group or $5,000 for a contract machine shop to build parts for a prototype. On the other hand, a pre-startup company might balk at buying a $200 sensor needed to do bench testing of a design idea.
It is essential that all project costs are forecast and tracked. Forecasting means that the team should know in advance what costs are coming up over the next few weeks and months so that everyone is prepared. Tracking means the team should know exactly what has been spent and what is left. Establishing a project budget early in the Fall semester is a good place to start.
Each team should appoint a team treasurer. The treasurer is charged with all money matters, from keeping the web checkbook up to date, to consulting with the company about anticipated expenditures. The treasurer should be particularly diligent about tracking expense accounts.
There are two types of expenses that the project will incur: client company expenses and NPDBD team discretionary fund expenses.
Expenses related to prototyping and market research are paid by the client company. The client company approve expenses before they are incurred. Some companies will do the purchasing for you. Other companies will reimburse you for out of pocket costs. Still other companies will place a deposit in the NPDBD course account for use by the team. At an early meeting, discuss with your company how such expenses will be handled. Discuss what expenses are appropriate, what expenses are not appropriate, who from the company needs to give approval for expenses, and the paperwork involved for being reimbursed. Ask (don't assume) the company if they are going to cover a particular expense.
Track all company-paid project expenses in the web checkbook. As for getting reimbursed by the company, the process depends on the company, so ask. The course is not involved in this.
The course provides each team with a $1,000 discretionary fund to cover expenses related to the project which would be inappropriate or inconvenient for the sponsor to pay. Use the fund to pay for small parts and lab supplies for the prototype, copying, occasional snacks for the team, a reference book, or other project related expenses. The company should be first in line to pay any and all project expenses. The discretionary fund is there because sometimes the company approval procedure takes too long or the expense is so small that it is not worth running through the company. At the end of the course in May, you should have a good portion of the $1,000 remaining.
The discretionary fund is managed as a standard University account with a University EFS number. Because this is a U account and because the U has strict audit procedures, the rules below must be followed if team members wish to be reimbursed for out-of-pocket expenses.
First, whenever possible order items through U Market because shipping is free and because there are no administrative overhead costs to process the purchase. Ask an instructor or the Course Administrator if you don't know how to use U Market. U Market, among other suppliers has Innovative Office Solutions (kind of like Staples), Digi-Key (a leading distributor of electronics) and Grainger (industrial supplies; equivalent to Grainger).
Discretionary Fund Rules
Appropriate expenses for the discretionary fund
How to buy
Reimbursement procedure for discretionary fund, out-of-pocket expenses
Follow the instructions on the NPDBD reimbursement form, and submit the form to the Course Administrator. The person submitting the reimbursement form must also submit a a W-9 form (one-time activity). One person per team (preferably the Treasurer) can submit reimbursement requests as long as they are the ones making the purchase. When possible bundle receipts and submit one request because it costs the university a lot of money to process the request. Reimbursements must be submitted within 30 days of incurring the expense.
The record of project expenses is kept in a checkbook on the team Google Drive. Set this up as a Google doc spreadsheet. Have separate sections for company expenses and discretionary fund. The treasurer must keep the checkbook up to date as it must reflect project expenses with absolute accuracy.