Travel Policies: The Good, the Bad, and Achieving Compliance
Not all travel policies are created equal. Some are good, some are bad, some are easy to understand, and others are just plain painful to adopt. If you’re unfamiliar, a travel policy is your company’s written documentation for planning business travel logistics. Unfortunately, just because you document business travel policies, does not mean you are guaranteed compliance.
Now, it’s worth highlighting that travel policies are not one-size-fits-all and that to be effective the policy needs to straddle business goals while also considering the business traveler. It is also essential that the policies reduce stress and enhance worker productivity. Next, we will review a few areas where businesses should focus when it comes to creating a policy everyone can stand behind.
Bad Example: Finance teams pull flight and hotel costs from the year prior for frequently traveled cities and creates price caps based on previous expenses. As a result, the budgets are out-of-date upon inception.
Good Example: TravelBank calculates a budget based off of real time market rates when a traveler goes to search for a flight or hotel. This budget is then used to guide the traveler through their booking selection to help them stay within policy and save the company money. If for some reason, they need to go over budget, a company can allow flexible bookings (employees can go over within a certain percentage or dollar amount of recommended budget) or they can request to book and their manager/approver will be notified.
Bad Example: An employee is required to get sign-off from a manager prior to booking a trip. They price out the trip online and email costs and other pertinent information. Unfortunately, their supervisor does not review the email in a timely manner, or has questions that delays sign-off. When the employee goes to book the trip, flights are no longer available, the hotel is booked, or rates have increased. As a result, the process starts all over again.
Good Example: The approval process is automated for in-budget booking on flights and hotels. If a trip is out-of-budget, managers are notified that a review is necessary prompting for a simple sign-off, thus improving efficiency. Upon approval, the booking is automatically processed.
Bad Example: Employees must book economy class and select the least expensive flight to their destination, regardless of travel time and layovers.
Good Example: As we highlighted in our Flexible Policy Guide, “For flights, skip the layovers. And while business class isn’t necessary for shorter travel, bump it up from basic economy and encourage flyers to book as far in advance as possible.” You may also consider allowing for upgraded seating for long haul flights over a certain number of hours.
Bad Example: An employee has errors on their expense report, is missing receipts, or failed to align the correct billing or project categories. As a result, their reimbursement is delayed until the expense report is corrected. Since the employee was required to book travel on their own card, the reimbursement delay impacts their personal finances.
Good Example: Thanks to apps like TravelBank, delayed reimbursements due to errors in expense reports, lack of receipts, and misaligned billing codes can become a thing of the past. It is our goal to simplify this process by providing the functionality to take pictures of receipts, which then auto-populates the expense details. Employees can backfill additional notes regarding business purpose, vendor, and names of co-workers or clients present. Travel can be booked on personal cards or assigned corporate cards, and after approval, reimbursements can be processed in as little as 24 hours. We also suggest to set a date for reports to be submitted, like within 14 days of the end of a trip, for example. This helps to ensure timely processing for employee reimbursement.
Why Compliance Matters
An effective travel policy provides direction and requirements while striking a balance between the financial needs of the company and safety and convenience considerations for business travelers. Key areas of focus should include reimbursements, approval processes, flight policies, and budgets, just to name a few.
At the end of the day, employee adoption of policies is essential to attain compliance. Whether you have a policy in place that is in need of a refresh, or are starting from scratch, we can’t suggest strongly enough the importance of working cross functionality to gain an understanding of your business travel requirements.
The TravelBank team is also ready and willing to help. Want to learn more? Watch our recent webinar and learn how to create a policy that will serve your whole company.