Essential Travel Policy Parameters and Why They Matter
This is the first post in a three-part series focused on corporate travel policies. Find part two, which concentrates on designing a travel policy that fits your corporate culture, here.
Business travel is an essential component of today’s working world and accounts for a large percentage of corporate expenditures. This segment of travel stimulates the economy with billions of dollars being spent annually on airfare, ground transportation, accommodations, meals, and more.
In fact, the U.S. Travel Association estimates, “Direct spending on business travel by domestic and international travelers, including expenditures on meetings, events and incentive programs (ME&I), totaled $327.3 billion in 2018.”
Eliminating Ambiguity in Business Travel Compliance
As with most aspects of business, a large budget allocation also means a need for clearly defined rules. More rules? Well, this oversight is for a good reason. Corporate travel policies exist to ensure employee safety, improve budget management, and streamline booking and reimbursements. When adopting a travel and expense policy, it’s important to consider a few things:
- What is your company culture?
- What are the goals for implementing this policy?
- What travel and expense scenarios apply most frequently for your business?
Once you’ve baselined answers for the above, creating your organization’s corporate travel policy is much easier.
Essential Elements of a Corporate Travel Policy
Travel policies should be designed to make the booking and expense reporting process as straightforward as possible for employees. Additionally, following the processes outlined in the policy ensures that employees are reimbursed in a timely manner, for the full amount.
When designing your travel policy, keep in mind that it should suit your company’s needs and culture. However, there are a few essential areas we recommend defining in your policy.
Advanced Booking Requirements
When it comes to travel, the adage “time is money” rings especially true. Travel should be booked as far in advance as possible in an effort to obtain the lowest cost. For instance, a policy could state that employees should book flights for domestic travel at least 14 days in advance of a scheduled domestic trip and at least 28 days in advance for international travel.
Employee safety is a primary goal of a corporate travel policy. It’s good practice to ask business travelers to provide emergency contact information. Additionally, when your travel policy requires employees to book with one managed travel platform, their flight details, the name of the hotel, and itinerary information are readily available to their approving manager. The company should make available to the employee information on travel insurance and a corporate emergency contact number.
When creating a travel policy, it’s important to clearly define the approval process. By doing so, less time is lost going back and forth for supervisor sign-off. Additionally, TravelBank’s app automates the process for in-budget booking on flights and hotels. For bookings that are out-of-budget, managers are notified that review is required, simplifying sign-off and improving efficiency.
With TravelBank, policies pertaining to budget can be enforced through the backend settings of our app. This allows you to customize preferences based on the level of seniority or trip type. For instance, with the app, you can set parameters that VPs are allowed to book business class airfare or employees must book a 3 star hotel or higher. Through company settings you’re able to customize your preferences to fit your travel policy. Here are a few examples:
- Airfare can be based off of real-time market averages for economy, business, or first class; non-stop or multi-stop.
- Lodging can be based off of real-time market averages for lodging distance from a specific address or by hotel rating (i.e. 1, 2, 3, 4, or 5 star hotel).
- Ground Transportation can be calculated from real-time market averages for economy, standard, or luxury car rental rates, as an example.
Expense Reporting & Receipts
For every trip, business travelers must create a detailed record of their expenses. It is recommended that employees provide the original receipt or photo for any transaction (your company can designate exceptions). TravelBank’s app simplifies this process, enabling your road warriors to take pictures of receipts, which then auto-populate the expense details. They can then fill out additional notes regarding vendor, business purpose, and the name(s) of other employees and/or clients present. We advise that you set a date for reports to be submitted, such as within 14 days of the expense occurrence, to ensure timely processing.
Informed employees are happier than an employee that feels like they are constantly stabbing in the dark for answers. This is especially true when it comes to travel reimbursement. If your business traveler knows that their expense reports will be reviewed, approved, or denied within 14 days of receipt by accounting, and that reimbursements will be processed on a defined basis, it will alleviate uncertainty and save the finance team unnecessary email requests regarding the processing timelines.
Designing Your Corporate Travel Policy—We Can Help!
We know what you’re thinking—great, another policy to create and manage. Well, we’re here to help. Not only have we worked with clients to create easy-to-follow travel policy guidelines, but our app also supports compliance. With our recent release, companies can use TravelBank to create, communicate, and enforce travel policies.
It was our goal to provide a user-friendly experience for companies that have established travel policies, but also those that are building out their program, to have a guided experience in creating policies that work for them.
With the TravelBank app, company admins can set advance booking rules, define hard caps for travel-related costs, and build-in the appropriate amount of budget flexibility for your organization. For employees, policies are clearly defined and they have access to their own travel parameters, so they know they’re making the right choice for the company every time. While allowing for customizable nuances, policies are easy to adopt and enforce through automated approvals and booking notifications.
Let’s face it, the last thing anyone wants to deal with is another set of business rules. However, at the end of the day, a well-designed corporate travel policy provides employees clear travel and expense guidelines that help them to make smart spending decisions and ultimately save your company money and the headache of deciding where to draw the line on reimbursements. With clear guardrails and a good policy, everyone is able to understand what is and is not reimbursable, save time booking travel, and conduct business in a productive manner.
Want to learn more? Check out our Flexible Travel Policies Guide.
If you have questions or are ready to get started, let’s talk.