How to put together an effective corporate travel policy

A corporate travel policy is an essential tool for any modern corporation. Why? Corporate travel is a growing trend. 

In 2017, the total value of global business travel was estimated at $1.3 trillion and is expected to exceed $1.7 trillion by 2023. Furthermore, a significant portion of today’s employees not only enjoy travelling for business but often expect it.

The purpose of a travel policy is to set clear guidelines for business travel. 

The bulk of the policy will deal with the various expenses associated with business trips, but a good policy will also factor in employee satisfaction.

Whether you’re looking to modernise an old travel policy template or create a new company travel policy from scratch, we’re here to guide you through the process step by step.

The benefits of having a corporate travel policy

From the management point of view, the most obvious perk is reducing costs. Having a corporate travel policy in place also helps you build a detailed picture of your company’s travel spending. This makes forecasting future expenses and budgeting far easier.

Your employees benefit from an effective travel policy. Clear guidelines on all aspects of business travel take a lot of the guesswork and frustration out of the process. A well-crafted travel policy takes into account the wellbeing of your employees—which in turn boosts their motivation and productivity. 

What are the qualities of a good travel policy?

One survey found that as many as 60% of employees may be unsure of the purpose of their company’s travel policy and that less than 50% of employees follow it consistently.

Make your travel policy work for you—ensure that it is:

Clear. Make the policy easy to understand. Be specific and unambiguous.

User-friendly. Break your policy down into smaller sections and order the information logically.

Relevant. Include only items that are pertinent to your company.

Realistic. Research your spending guidelines, and take into account differences between travel destinations.

Flexible. Rules that are too rigid can lead to non-compliance. Offer options when possible while encouraging expense policy best practices.

Collaborative. Seek input from finance, operations, and HR departments as well as your travelling employees.

Up to date. Revise your policy when necessary.

Define your travel policy goals

An essential step in creating your travel policy is to assess your company’s needs and define your goals. 

Assess your current travel practices. Make a list of all the aspects of business travel in your company and note down what is and isn’t working. 

Set your goals. Decide what your priorities are. Do you want to focus on reducing expenses? Is boosting employee productivity your top concern?

Consider employee preferences. Find out what your employees think. Pay particular attention to any issues that arise frequently.

What to include in your company travel policy

Every business has different needs, but most travel policies will follow a similar structure. Consider including the following sections:

An introduction. Explains the purpose and value of your travel policy and to whom it applies. 

Expense guidelines. Usually broken down into different travel spending categories, such as:

  • Flights
  • Local transportation
  • Accommodation
  • Meals 
  • Legal and medical expenses

Reporting procedure. Provides details on how and when to report expenses.

Safety information. Provides instructions for emergencies and for staying safe in general.

Define your policy on expenses

For each category of travel expenses, you will need to communicate all the relevant information in a concise manner. Make sure that your employees know:

Who is responsible for making bookings. For example, will the employee, the HR department, or a travel management company make bookings for flights and hotels?

Where to book. List any preferred booking sites, airlines, hotels, and car rental companies that you want your employee to use if they are booking independently. 

Where relevant, specify also things like which class to travel in, what kind of room to book, and what size of car to hire.

Booking period. State when bookings need to be made, e.g. two weeks in advance.

Approved expenses. List which types of spending will be reimbursed and which will not (e.g. excess baggage fees, dry-cleaning, and tips). Note if there are any spending limits, a recommended price range, exceptions, or expenses that need pre-approval. 

Payment details. Note if travellers should use their personal card or a company card. Clarify who will collect any frequent flyer or other reward points, if applicable.

The process for reporting expenses

The process should be clearly defined. Provide guidelines on the following:

How to submit information. Will you provide paper forms to fill, or should your employees input the details into an app or an online tool?

Required documentation. Define when receipts and other documents need to be provided, e.g. at all times, or when spending exceeds a certain amount. 

Timeframe. Explain how soon an expense report should be submitted, and when to expect a reimbursement.

Contact details. Let your employees know who to contact about their expense report.

Safety information

In order to fulfil your duty of care to your employees and to ensure their safety, add a section on what you want them to do in case of an emergency or sudden illness. Include details of any insurance policy held by your business, including what it does and doesn’t cover.

Enforcing your policy

Once you’ve completed your travel policy, you need to get the word out and encourage everyone to follow it. Make the document easy to access on your company’s intranet, and let everyone know about it.

Extra steps you can take to ensure that everyone is sticking to the guidelines include using an app or an online management system that automatically enforces your policy, or asking a travel agent or an external management company to enforce your guidelines for you.

And you’re done—until the next revision at least! Do seek out feedback and keep updating your corporate travel policy, so that it continues to reflect your company’s goals and your employees’ needs.

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