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Optimising business travel: A guide to creating corporate travel policies

By March 8, 2024March 21st, 2024No Comments10 min read

Optimising business travel: A guide to creating corporate travel policies

When it comes to corporate travel and managing travel expenses, a travel policy brings it all togetherIt not only influences travellers to opt for cost-effective choices but also functions as a crucial visibility tool for managers and the HR department.

When properly implemented, it becomes a protective measure for your personnel. 

What is a travel and expense policy? 

A travel and expense policy (T&E policy) is a set of guidelines and rules established by an organisation to govern the procedures and limits associated with employee travel and related expenditures. This policy aims to ensure consistency, accountability, and compliance with the company’s financial and operational objectives.

It typically outlines:

  • How, where, and when to book.   
  • Approved technology for travel management.   
  • Preferred suppliers for air travel, land travel, and accommodations.   
  • Approvals process for out-of-policy bookings.   
  • Trip extensions and personal travel.   
  • Business travel expenses that are/aren’t covered.  
  • The reimbursement process. 
  • Business travel insurance information. 
  • Emergency procedures and contacts.  

Your company’s travel and expense policy should mirror the organisation’s culture and values, offering support to your travellers and addressing their needs. It also plays a crucial role in safeguarding your company from unexpected circumstances. Serving as a central document, it steers your team through the entire process of undertaking business travel, from start to finish. 

While you might hear a few grumbles and groans around the words “travel expenses” or “corporate policy,” don’t worry, your policy does not need to be rigid and inflexible.  

If your travellers opt for independent booking, respect their autonomy. They can continue to self-book, with the added benefit of a more efficient tool provided by your company

Why are corporate travel policies important? 


A c
orporate
travel policy needs to address some of the most complex and important issues related to business travel. 
 
Well-crafted policies offer clarity and solutions to common questions and scenarios for both employees and employers.  
 
The ongoing process of developing, reviewing, and revising these policies should take into account diverse perspectives and needs, along with data evaluation.  
 
Your travel and expense policy should remain adaptable to evolving travel patterns, employee requirements, and practical considerations.

A recent Deloitte survey asked organisations how they would rate their current procedures and processes concerning business travel. 
 
There were various responses from “no process” to “comprehensive approach”. The majority of organisations saw themselves in the centre-ground with a third of respondents accepting that they had taken limited action and needed to do more in this area.

What happens if you don’t have a travel and expense policy?

To put it simply: what can go wrong, will probably go wrong.  

At the end of the day, a travel and expenses policy aims to streamline expenses, save costs and eliminate fraud.

Failure to address these factors exposes you to:

  • Overspending due to hidden costs if travel expenses are not under constant supervision.  
  • Late or incomplete expense reports may occur if employees are unaware or uncertain about specific guidelines. 
  • An increase in fraudulent expense claims, including duplications, exaggerations, and misreporting of business expenses. 
  • Without guidelines, fraudulent behaviour cannot be controlled or addressed.  
  • Without a fixed way of recording and storing expense data, you’re left with no insights into spending trends and patterns.   

 

8 key considerations in your corporate travel policy

1. Involve key stakeholders

Your travel and expense policy will touch nearly every employee and department within your organisation.

Involve key stakeholders across the business and any departments which are frequent travellers to ensure that the policy reflects all perspectives and needs. 

2. Track travel expenses for reporting and analysis

Accurately tracking your organisation’s travel expenses can help you understand what is and isn’t working in your corporate travel program. These data points offer leaders insights into the program’s effectiveness, guiding potential revisions to the policy based on what is or isn’t working.

Having the appropriate tools provide policy leaders with the necessary information to make important decisions. The company needs a standardised system for completing expenses to avoid data duplication and create a consistent reporting process for all employees.

With accurate expense reporting you’ll get a much better understanding of the ROI for business travel. 

3. Consider employee satisfaction, placing emphasis on effective communication

Some business travellers might have strong feelings about travel policy changes, especially if it affects their usual travel routines.

For instance, some employees may prefer certain hotel chains or airline brands, and a shift to a “mandated” provider could lead to serious dissatisfaction

That’s why consistent communication is crucial regarding the creation, evaluation, and modification of your policy

It’s also important to keep yours clear and easily comprehensible, employing subheadings, bullet points, examples, and concise paragraphs to enhance readability.

4. Provide resources

A well-crafted policy goes beyond listing the do’s and don’ts. It can serve as a valuable resource for both employees and managers.

You should consider including the following resources:

  • Links to your expense management platform. 
  • Forms for expense reporting. 
  • Travel insurance coverage with a link to your carrier. 
  • Lists of purchases that are/aren’t allowed. 
  • What to do if there is an emergency.
  • Key phone numbers – HR, finance, corporate travel office…

5. Set clear policies for booking and costs

Your travel policy has the potential to clarify uncertainties related to corporate travel. Ensure that it covers various areas that frequently raise concerns for both business travellers and administrators, such as:

  • Whether business travellers are required to utilise a corporate travel agency or website. 
  • Expected turnaround times for reimbursements and expense reports.  
  • Budgetary guidelines for airfare, hotel and ground transportation, including whether there are mandatory vendors. 
  • Procedures for handling rejected travel expense submissions or requests. 

6. Incorporate an understanding of duty of care

Employers are responsible for a duty of care, the legal obligation to research and develop a plan that reduces the risk for employees travelling on behalf of their employers

The travel policy should explain what duty of care is, and the employer’s commitment to its employees and how far that extends

Begin by discussing any necessary changes to the policy with travellers, who regularly complete high-risk business travel, and their managers. Examine global risk trends, discuss past experiences, and draft initial guidelines

Your policy needs a pre-travel process and a standardised risk assessment report, especially when travelling to high-risk areas. Incorporate travel alerts into the itinerary and ensure that the company has access to employee contact information and health records, if applicable

The policy needs to have multiple contingency plans detailed and ready to implement if needed. Be sure that employees have access to helpful technology if problems occur while travelling. 

7. Include travel risk management considerations

Travel risk management involves anticipating, preventing, and responding to potential issues that may occur while employees are on the move. These risks can encompass a wide range, from weather-related problems and natural disasters to social unrest and terrorism. 

Its objective is to recognise and prepare for probable risks, minimising the likelihood of these threats becoming a reality whenever possible.

In the event that a threat does arise, travel risk management will offer solutions to deal with it. 

Travel risk management and duty of care are closely connected, often sharing common ground. Both play vital roles in ensuring the safety of employees. 

8. Practice continuous improvement

To keep corporate travel policies relevant, you need to carefully check both the policy and the data that supports it.

Regularly reviewing the policy, with a focus on employee safety, costs, and compliance, ensures that the company maintains policies that contribute to the well-being of the organisation and its employees.

 

Is there anything missing from your travel policy?  


If you think your travel policy is missing something, ask yourself the following questions:

  • Are there any restrictions on who travels domestically or internationally? Or guidelines around reasons for travel?   
  • Are there any restrictions on when business travel is not permitted? Like during an auditing period or financial downturn?   
  • How should travel arrangements be booked? Through your online booking tool or with a travel management company? How far in advance should domestic and international trips be booked?   
  • Do you have preferred partners for air travel, accommodation, ground transport or travel insurance?   
  • Who’s responsible for authorising travel expenses and business trips?   
  • What’s the process for managing/submitting expenses?   
  • How will you prevent or deal with non-compliance to the travel and expense policy?   
  • What are the conditions if someone wants to extend their business trip to take personal leave?  
  • Do your business travellers have a daily allowance for meals, snacks, and drinks? How much is it, what does it include – and what’s not covered?  
  • What’s the procedure in cases of Acts of God or Force Majeure events? Does your team know who to call for assistance?   
  • Who is responsible for updating and reviewing your policy, and how often? 

 

How can you improve corporate travel policy compliance?


Let’s
say you’ve done your research, assembled the necessary resources, and effectively communicated your travel and expense policy to employees. What should you do if you feel your employees aren’t actually following it?

Keep track of compliance issues 

While it may seem challenging, it presents a valuable opportunity to enhance policy compliance and ensure your team aligns with guidelines. By pinpointing areas where employees face challenges, you can strategically tailor communications to assist them in staying compliant.

For instance, if you find that some team members frequently submit travel expenses that deviate from travel policy guidelines, such as exceeding meal allowances or including non-reimbursable expenses, proactive measures can be taken.

By tracking these patterns, you can notify travellers in advance when they are about to submit out-of-policy expenses and guide them to the relevant information

Establishing compliance targets for travellers provides a measurable metric for overall policy effectiveness. Without set goals, evaluating the value of your efforts becomes challenging.

Over time, these initiatives should reduce non-compliant spending by employees, enhancing the overall effectiveness of your travel and expense policy. 

Ensure your travel and expense policy is up to date 

If it’s been a while since you last reviewed your travel and expense policy, it’s no wonder your travellers aren’t complying. 

Outdated travel policies are misleading, inaccurate, and nearly impossible not to violate. Laws and regulations change, UI on travel tech gets a makeover, company culture and values evolve – you get the picture. There’s a lot that can change over time.  

To avoid confusion within your team, it’s advisable for businesses to review their travel policy at least annually to ensure its relevance.

Download your free corporate travel policy template

Crafting a comprehensive travel policy template for your company can seem overwhelming. But fear not, Capture Expense is here to assist you every step of the way.

Empowering your organisation,
one expense at a time.

Experience the power of our all-in-one platform and say farewell to spreadsheets! Save valuable time and money with effortless automation for reimbursements, vehicle mileage, and credit card reconciliation.

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