Understanding Corporate Travel Policy
Organizing and managing business trips is a challenging endeavor for many companies. Numerous things need to be considered, and a minor oversight could cause a lot of trouble for everyone involved in the trip. For this reason, companies should have a clear and well-written corporate travel policy to help facilitate the trip's management and better control the company's expenses.
This blog discusses everything you need to know about corporate travel policy, helping you gain the proper knowledge in making one for your organization. But before we dive into the challenges and best practices of creating a travel policy, let's first get its definition out of the way.
What Is a Travel Policy?
A corporate travel policy is a formal document that outlines the procedures and rules of business-related trips. The policy mainly focuses on the expenses, arrangements and authorization processes. This document will give autonomy in your company's travels and give employees peace of mind since they have clear guidelines on what they can or cannot do, regardless of their position in the business.
In addition, a travel policy increases efficiency by reducing staff questions. Whenever something is unclear to them, they can check out the document and the answer they're looking for is there. Plus, it makes the booking process easier for both parties. Since a travel policy for employees provides a list of preferred hotels, airlines and other travel agreements, the time for travel planning is significantly reduced.
A well-written policy can also cut business costs over time. By outlining travel agreements with hotels and airlines, the organization can control how much the employee spends while traveling, which eliminates unnecessary charges.
Common Challenges With Travel Policies
A business organization can't go wrong with a solid corporate travel policy. But creating one comes with the following challenges:
Ambiguity
One of the most common challenges with travel policies is the lack of clarity on what is considered a "business" trip. The ambiguity in this definition can lead to many problems, such as employees claiming expenses for personal trips or people taking advantage of loopholes to take more time off than they're entitled to. However, management can quickly resolve this issue by defining "corporate trip" more clearly.
Policy Limits
Travel policies are often too rigid and contain too many rules. Since everything is already outlined, this means that they don't take into account the different needs and circumstances of each employee.
Employee Dissatisfaction
When employees are given limited options, this could easily lead to dissatisfaction which can decrease their morale and work performance. Therefore, companies should try to meet halfway. A good policy is tailored to the company's current needs and its employees' preferences. Therefore, gathering data and information about travelers is essential.
Difficult to Understand
Travel policies can be challenging for employees to understand and follow. Therefore, it's crucial to create a travel policy for employees that is simple. All the rules should be detailed, must be explained clearly, and worded in a way that is easy to read.
Crafting and implementing travel policies will require everyone’s cooperation and effort. It takes time to implement policy changes, and you need to measure certain metrics to determine your success.
How Should a Travel Policy Be Written?
A travel policy should be written to protect the company and its employees. It must contain everything a traveler needs to know about corporate travel in general and travel guidelines, rules of conduct, cost management and reimbursement arrangements.
It must specifically explain the following subjects in detail:
Travel Booking and Approval
The policy must state how the travel is booked, how far in advance they must be arranged and the maximum costs of the trip. It's wise to include a statement in your policy that encourages employees to book air flights responsibly. Also, specify what circumstances a traveler can book first class versus economy.
Public Transport Options
An effective travel expense policy must have the company's preferences for public transport and state the maximum costs for bus, taxi and train tickets. Also, indicate if the company allows ride-hailing apps like Lyft and Uber. These services adopt a surge pricing model, which means they adjust the prices to match rider demand to driver supply. As a result, prices are unstable and can negatively impact cost-saving policy goals.
Vehicle Use
If the employee uses their car during corporate travel, the policy must state the guidelines for fuel reimbursement. On the other hand, if the employee opts for car rental, the policy should give suggestions that regulate the costs since prices can vary significantly depending on the car type.
Meals
Most travel policies state that the company will not reimburse meals anytime after the employee's return flight lands. However, this rule may seem too strict to travelers, leading to dissatisfaction. In addition, the policy must also include a statement about alcohol. For example, alcohol expenses will only be reimbursed when the meal involves a client.
Client Entertainment Expenses
If the company is trying to win over a client, it's expected to give them gifts or pay for their meals. This is an expense that the policy must clarify. In addition, the document must state the guidelines for managing client entertainment costs, reminding employees that their purchases should be responsible and reasonable. Events can cost a lot of money, and expenses during client entertainment can quickly get out of hand.
Bleisure Activities
A good corporate travel policy must explain how the company handles the expenses in bleisure activities. Again, it must expound on how the costs are managed and what is included in the reimbursement.
Non-Refundables
The travel expense policy must clearly state what items the company will not give reimbursement for. Common things that often fail to make the reimbursement cut include dry-cleaning, hotel staff tips, in-room movies, childcare, pet boarding, parking tickets, airline seat upgrades and clothing purchased during the trip.
Documents Needed for Reimbursement
The travel expense reporting process varies widely across companies. But regardless of which approach you take, your corporate travel policy will likely need to address the following:
What documentation does the company need to reimburse the traveler?
What is the timeline for the employee to submit expense reports after the trip?
How many days until the traveler is reimbursed after submission?
What happens if the employee fails to submit the proper documentation?
The travel expense policy must clearly state what items the company will not give reimbursement for.
Best Practices To Consider
A corporate travel policy should protect the organization's and its employees' interests. But finding the right balance can be tricky. So, follow the best practices for writing corporate travel policy to ensure a harmonious relationship between the company and the workers:
Tailored Tone
There is no one-size-fits-all approach when creating a corporate travel policy document. Every company is different, and the guidelines should follow the organization's nature. For example, if the business has a laid-back culture, creating a travel policy for employees that reads too strictly wouldn't make sense. At the same time, employees of a more formal company won't take the travel policy seriously if the tone is too casual. When the document is written in a way that reflects the organization’s values, it has a better chance of resonating with the employees, which means there's a higher chance of them taking the rules and guidelines to heart.
Define Your Objectives
Organizations must draft any official company document with clear goals in mind. When you fail to set objectives, the result may be a policy with no definite structure or direction. Determine the top two or three goals during the planning stages. Examples of good objectives for a corporate travel policy include:
Reduce costs
Reduce manual work for the human resources teams
Reduce confusion for travelers
Increase efficiency in bookings
Increase traveler satisfaction
Improve financial tracking of travel expense
Book with Experts
When you book travels using a business travel consultant, you have a better chance of consolidating everything associated with corporate trips, allowing management to make better budgetary decisions. Travel consultants often utilize the latest tools and technology to capture and assess the details of each travel transaction. This means you'll have full transparency of the expenses allowing you to pinpoint areas of spending waste. Plus, you'll have access to experts who can identify opportunities within the data and make recommendations based on your
Keep the Policy Updated
As the world changes, so do the ways we travel. Therefore, businesses must stay up-to-date with their policies. A neglected or outdated approach can potentially lead to confusion and inconvenience. By regularly updating the company travel guidelines to reflect recent changes, there's a higher chance of the travel program being used since people will find them helpful. So do your research, discuss it with staff and review your policy regularly.
Reinforce Compliance
Regular communication is the most effective way to reinforce the importance of policy compliance. First, managers should be educated on the policy and trained on the company's online tools or platforms. Then, they must remind their team of the importance of the procedure to ensure that they will use it as a resource whenever they need to travel for business. Also, one part of communication is ensuring that the travel policy is accessible to everyone in the organization. It should be added to the company's intranet or added to an online travel portal.
Regular communication is the most effective way to reinforce the importance of policy compliance.
How To Get Your Company Onboard With Your Travel Policy
For the policy to achieve maximum effectiveness, the right people must be involved in its creation and implementation. Here's a list of who should help write the company travel guidelines and approve the final version:
Office manager: Officer managers are more aware of the current travel booking process issues, and their insight will help set the right goals for improving the policy.
Travel manager: Travel managers are the people who get to work closely with travelers, allowing them to know their usual behavior and common complaints. They can use this knowledge to set objectives that will benefit the employees. In addition, travel managers are the professionals who arrange corporate trips, which means they know the best travel vendors to help minimize spending.
CEO: The CEO is a busy individual, but their business-related insight can help push the policy's cost-saving objectives in the right direction.
COO: The COO can help create processes that focus on efficiency and craft procedures to improve duty of care and compliance.
HR: The human resource team is the group that understands employee demands and expectations the best.
Travelers: Many companies make the mistake of not involving their employees who frequently go on business trips when making the policy. They are the ones who know what works and what doesn't with the current travel guidelines and can provide valuable suggestions to improve its procedures.
Stakeholders: Once you have a draft of your new travel policy, it is time to let the stakeholders approve it and allow them to give suggestions on which items should be improved.
How CI Azumano Can Help You With Your Travel Policy
CI Azumano Business Travel offers an effective travel management service by seasoned corporate travel agents that will streamline your booking processes. Our agents can help your company with the following:
Duty of Care & Risk Management
We will work closely with your organization to keep employees safe and productive during their business trips. Our team provides pre-travel notifications, such as health and safety advisories, to help travelers avoid situations that jeopardize their health and safety.
Traveler Tracking
We monitor your travelers day and night using a custom portal to ensure they are out of harm's way. In addition, our expert travel agents overlay regionally specific safety warnings and global events with your employee's current location for updated safety tracking.
Trip Continuity Management
Our team and technology solutions will reduce costly disruptions with proactive monitoring and re-accommodation. Additionally, we will aid your travelers in making time-specific decisions with their safety and your company's travel policy in mind.
CI Azumano Business Travel is a proud elite partner of SAP Concur, a company that uses intelligent technologies to improve the travel and spending process from end to end. We can help your company streamline its travel procedures using state-of-the-art tools.
Book from anywhere: Allow travelers to book from their phone or desktop to increase satisfaction and productivity.
Itinerary management: Enables management to combine every trip aspect into a single itinerary.
Notifications: Provides email or text notifications at the right moment to help employees make wise travel decisions.
Trip authorization: This allows for a unified authorization process for corporate travel plans. With this tool, managers can approve trips from anywhere.