Corporate travel policy
Work-related travel can be a real adventure, but without a clear set of guidelines, it can quickly turn into a wild goose chase. Businesses should have a solid corporate travel policy to keep employees travel and budgets on track and avoid any last-minute surprises. Many organizations use travel and expense management software to maintain a record of their travel policies and ensure collaboration between HR, Finance, and leadership teams.
Corporate travel management is a vital part of business operations. However, it can be a significant source of confusion and expense without a corporate travel plan and procedure. A company travel policy is crucial for any business operation.
It helps keep travel expenses in check, ensures compliance with legal requirements, and promotes sustainable travel. Whether you’re a small business or a large corporation, it’s time to take control of your business travel and craft a policy that works for you. Be it car rental, ground transportation, air travel (business class or economy class), or any other travel arrangements. Ensure your corporate travel policy provides information on all types of expenses.
What is a travel policy?
A travel policy is a set of guidelines that lists processes involved in the booking, approval, and reimbursement of business travel expenses. It outlines rules and procedures to address employees’ travel-related confusion and creates hassle-free business purpose trips.
A travel policy also addresses legal and compliance requirements and includes communication and emergency procedures to support employees and employers at times of crisis.
Additionally, it encourages sustainable travel. The overarching objective of a company travel policy for employees is to ensure the workforce travels safely, efficiently, and cost-effectively while also being compliant with legal and ethical guidelines.
Also, Read: A Guide to Create a T&E Policy
Benefits of creating a travel policy
Business travel spending can quickly spiral out of control. Creating a travel policy helps you save money, increase efficiency, and keep your employees safe all at the same time. The benefits of a travel policy go beyond just controlling expenses. Here’s a breakdown of how a travel policy can benefit different stakeholders within a company:
- Employees: A travel policy can make the travel process more efficient for employees by providing clear guidelines for booking and expenses, which can save them time and hassle.
- Finance team: A travel policy can help the finance team track expenses, identify patterns, and make data-driven decisions to optimize the company’s travel procedures.
- Admin: A travel policy can make approving and managing travel expenses more streamlined, saving time and resources.
- Company: A travel policy can help a company in cost savings by setting clear limits on expenses such as per diem, lodging, and transportation.
Does my company need a travel policy?
Long answer short, Yes! A travel policy helps you control expenses, increase efficiency, ensure compliance with legal requirements, promote employee safety and security, and encourage sustainable travel options.
It can also be a valuable tool for attracting and retaining employees by promoting sustainable travel options and prioritizing travel safety.
Also, Read: A Business Guide to Corporate Travel Management
Elements of a travel policy
Travel and expense policy serves as a tool for employees and managers to plan and book trips, manage expenses, and ensure compliance with company policies and regulations. The following are some critical elements of a travel policy:
- Purpose: The purpose of the travel policy should be clearly stated to provide employees and managers with a clear understanding of the policy’s goals and objectives.
- Eligibility: The policy should specify who is eligible to travel on company business, including requirements for approval process and the coverage of different types travel costs like airfare, entertainment expense, personal expense, etc. The policy should also differentiate between personal travel and business travel.
- Travel Booking and Expense Management: The policy should provide guidelines on how employees should book travel and manage expenses. This may include information on preferred airlines (for international or domestic travel), public transportation availability, tolls, meal expenses, hotel room expenses, coverage of alcoholic beverages, travel insurance scheme, booking tools, expense reporting procedures, and details on other related expenses.
- Safety and security: The policy should address safety and security concerns by providing information on the company’s emergency response plan and guidelines for employees traveling to high-risk destinations.
- Compliance: The policy should ensure compliance with company policies and regulations, such as anti-corruption and anti-bribery laws, as well as compliance with local laws and regulations in the destinations where employees will be traveling.
- Reporting and approval: The policy should provide clear procedures for obtaining and reporting on travel, including who is responsible for approving and tracking travel plans and expenses.
- Review and update: You should review and update regularly to ensure that it remains current and relevant.
Future Read: How to Create an Expense Reimbursement Policy?
Business travel policy template
Below is a business travel policy template to take inspiration and craft one that suits your company’s needs.
The purpose of this travel policy is to provide guidelines and procedures for employees traveling on company business. It’s designed to ensure compliance with company policies and regulations, promote safety and security, and manage travel expenses effectively.
The employee’s manager and the Director of Finance must approve all business travel before booking.
B. Eligible Travelers:
All full-time employees and independent contractors are eligible for business travel.
III. Travel Booking and Expense Management
A. Preferred Suppliers:
Employees must book travel through the company’s preferred travel suppliers, as designated by the Director of Finance.
B. Booking Tools:
Employees must use the company’s designated booking tool for all travel reservations.
C. Expense Reporting:
Employees are responsible for submitting expense reports to travel and expense management software within seven days of returning from their trip, following the company’s expense reporting procedures.
IV. Safety and Security
A. Emergency Response Plan:
Employees must familiarize themselves with the company’s emergency response plan and contact the designated emergency contact in an emergency.
B. High-Risk Destinations:
Employees traveling to high-risk destinations must complete additional safety and security training and submit a travel risk assessment form before their trip.
A. Anti-Corruption and Anti-Bribery Laws:
Employees are required to comply with all applicable anti-corruption and anti-bribery laws, including the US Foreign Corrupt Practices Act.
B. Local laws and Regulations:
Employees must comply with all local laws and regulations in the destinations where they will be traveling.
VI. Reporting and Approval
The employee’s manager and the Director of Finance must approve all business travel before booking.
The Director of Finance tracks all business travel and ensures compliance with this policy.
VII. Review and Update
The Director of Finance will review and update this policy annually.
Any changes to this policy will be communicated to all employees via email.
*This is just a sample template, so it may only fit some companies’ specific needs.
Also, Read: A Guide to Business Travel Management
How and where to use a travel policy?
A travel policy is essential for companies of all sizes to manage and govern their employees’ business travel. The following are tips on how and where to use a travel policy.
1. End-to-end travel management
First and foremost, a travel policy should be used as a guide for employees and managers to plan and book business travel. The policy should provide clear guidelines on how to book travel, including the preferred travel suppliers and booking tools, and how to manage business expenses, including expense reporting procedures. This helps employees and managers to plan and book travel efficiently and effectively.
2. Expense management
Another critical area where a travel policy would be useful is in managing travel expenses. The policy will provide guidelines for managing expenses, such as lodging, meals, and transportation expense reimbursement rates. Additionally, the policy will outline the process for submitting and approving expense reports within set deadlines to ensure the company can efficiently manage its expense.
3. Travel-related resource
A travel policy can provide information and resources to employees regarding travel-related matters such as visa, passport, and vaccination requirements. This will help employees to plan their trips effectively and avoid any last-minute complications.
4. Communication and coordination tool
Furthermore, a travel policy can be used to communicate and coordinate among different departments within the company. For example, the HR department can use the travel policy to coordinate with the finance department to ensure that employees are reimbursed for their expenses in a timely manner.
The marketing department can use the travel policy to coordinate with other departments to plan and execute events and conferences.
Best practices to remember while creating a travel policy
Below are some best practices you should consider while drafting your travel policy draft.
- Clearly state the purpose of the travel policy to provide employees and managers with a clear understanding of the policy’s goals and objectives.
- Specify who is eligible to travel on company business, including requirements for approval and the covered travel types.
- Provide clear procedures for obtaining and reporting on travel, including who is responsible for approving and tracking travel plans and expenses.
- Ensure the policy is easy to understand and that employees are provided with the necessary information and resources to follow the procedure.
- Consult a legal advisor to ensure the policy complies with all relevant laws and regulations.
- Communicate the policy effectively to all employees and ensure they understand it and its implications.
- Encourage employee feedback and suggestions to ensure the policy meets their needs and addresses any issues that may arise.
- Make sure the policy is flexible to adapt to the company’s and employees’ changing needs.
- Keep in mind the company’s budget and financial constraints while creating the policy and adjust accordingly.
Common challenges with travel policies
Travel policies can be an effective tool for managing and governing business travel, but they can also present certain challenges. Some common challenges with travel policies include:
- Complexity: Travel policies can be complex and difficult for employees to understand and follow. This can lead to confusion and non-compliance, making it difficult for the company to manage and govern business travel effectively.
- Lack of standardization: Without clear guidelines and procedures, employees may have different interpretations of the policy, leading to inconsistent practices and a lack of standardization.
- Inefficiency: Policies that aren’t well-designed neither they’re aligned with the company’s needs can lead to inefficiency and wasted resources.
- Compliance: Companies need to ensure that their travel policy complies with all relevant laws and regulations, and failure to do so can lead to legal issues.
- Lack of enforcement: Even with a well-designed travel policy, it can be difficult to enforce if employees do not understand the policy or do not see the value of following it.
- Inflexibility: A policy that is not flexible enough to adapt to the changing needs of the company and employees can become irrelevant over time.
- Resistance: Some employees may resist implementing a travel policy, particularly if they feel it restricts their freedom or is too restrictive.
- Unforeseen events: Sometimes, policies can be challenged by unexpected events such as travel bans, pandemics, etc. Companies must have a plan to handle such situations and have a process in place to adapt to these changes.
Overall, the key to overcoming these challenges is to design a well-crafted and flexible policy that considers the company’s specific needs and goals and effectively communicates the policy to employees.
How Happay helps enforce corporate travel policy
Below are a few notable areas where Happay can effectively help enforce your organization’s corporate travel policy.
1. Simplify pre-trip request and approval with Happay
Employees can easily plan their business trips online with travel request forms and submit it to designated managers for authorization. Moreover, your travel desk and finance teams also have shared access for updating travel bookings and processing advances. This means you can eliminate unauthorized or last-minute travel and simplify travel management in your organization.
2. 100% policy compliant with Happay
Automate your travel policy enforcement with Happay’s policy engine. Transfer your company’s policies from paper onto the Happay system. At the time of report submission, the Happay system will auto-check all expenses with policies and trigger violation alerts, and nudges employees to make corrections. Thanks to Happay’s efficient travel policy engine, you don’t have to manually verify expenses, and employees don’t have to remember policies.
A corporate travel policy is a set of guidelines and procedures companies use to manage and govern their employees’ business travel. It serves as a tool for employees and managers to plan and book trips, manage expenses, and ensure compliance with company policies and regulations.
The key elements of a corporate travel policy typically include the purpose of the policy, eligibility for travel, guidelines for booking and managing expenses, safety and security, compliance with laws and regulations, reporting and approval procedures, and regular review and updates.
The responsibility for creating and implementing a corporate travel policy typically falls to the company’s management team, with input from relevant departments such as finance, human resources, and legal.
In the US, companies must comply with federal laws such as the Foreign Corrupt Practices Act (FCPA), which prohibits bribery of foreign officials, and the Federal Travel Regulation (FTR), which outlines government travel requirements. Companies may also need to comply with state laws and regulations related to business travel.
A5: It’s recommended that a corporate travel policy be reviewed and updated regularly, at least annually, to ensure that it remains current and relevant.
A corporate travel policy can be communicated effectively to employees through various methods, such as in-person training sessions, email communications, and online resources. Additionally, it is essential to ensure that employees understand the policy and its implications and to encourage feedback and suggestions to ensure the policy meets their needs.