How to Write an Effective Company Travel Policy

Writing an effective company travel policy, which is designed to help a company’s business travelers follow its travel booking and reimbursement procedures, is a tricky task.

 

Download Your Customizable Travel Policy Template Here

As Suzanne Wolko, a Luxury Travel Advisor and Consultant for Arden Road Travel who has over 20 years of experience in travel management and finance, tells us: “Writing T&E policy is easy if you say ‘You can only do this and never do this,’ but we all know travel is never straightforward black and white – there are shades of grey (canceled flights, upgraded cars, hotels and expensive meals.)” These shades of grey, as Wolko aptly describes them, may leave some companies wondering if creating a travel policy is worth the effort.

In reality, this is all the more reason to create policies. Your company can’t control the extra expense of an upgraded car if it hasn’t set a guidelines about the types of cars employees can rent!

While many large companies have company travel policies, smaller companies often do not. Yet, even if you own your own 3-person company and employees only travel twice a year, you should consider creating a policy.

Reasons Why You Should Create A Travel Policy

Egencia, the corporate travel brand of the Expedia group, conducted a global survey of business travelers in 2016 with a focus on company travel policy. Not surprisingly, the study found that only 38% of business travelers are satisfied with their company travel policy.

What does this mean for companies? Travelers are likely to book out-of-policy, costing the company more money, or travelers will at the very least will be dissatisfied with their business travel experience, which could reflect in their performance at the company, at a client meeting, or in their willingness to remain as an employee. It’s important to create a corporate travel policy that is not only easy to follow and helps the company control costs but also factors in employees’ needs.

There are many benefits to a company travel policy. An effective corporate travel policy

  • Keeps the travel booking process organized
  • Streamlines the reimbursement procedures for travelers
  • Enables more savings (clear policy + happy travelers = more policy compliance = savings)
  • Helps your company avoid fraud
  • Protects employees through clearly outlined safety procedures

Travel policies may vary quite a bit depending on the company’s goals, travel practices, and culture; however, we’ve gathered some practical advice that will help companies of all sizes create an effective business travel policy.


What to Do Before Creating Company Travel Guidelines


Before you even think about starting to write the travel policy, you’ll want to have your preferred vendors in place, understand current travel practices, and set goals.

1. Negotiate travel discounts with traveler flexibility in mind2. Analyze current company travel practices3. Set goals for your travel policies
The data is clear. Employees want more options—more flexibility—in the booking process.So, before you write your travel policy, negotiate any travel discounts with this concept in mind. For example, Nathan Brooks, Director of Client Services at Egencia, suggests “negotiating contracts with key hotels in high-volume cities rather than signing chain-wide deals.”Before you tell employees in your travel policy that they have to book with one specific provider, consider ways to give them as many options as possible while still ensuring company savings through some negotiated discounts.
One of the best ways to create a successful policy is to first understand the current practices at your company.Take the time to map out how travel is being purchased at your company right now and collect as much data as you can about traveler practices. How often in advance are your travelers booking? When, if at all, are they booking business class flights? Use the data to understand traveler preferences (even better—ask employees about their preferences) and use that information to help you write a policy that finds a balance between traveler needs and company savings.

When you’re tasked with writing company travel guidelines, the last thing you probably want to do is more writing—but taking some time to list your goals for these policies, and working with other company constituents on these goals, can be worthwhile.Is your top priority helping travelers book their trips? Is it safety? Instead, are you most concerned about employees spending money on items that aren’t reimbursable? Use these priorities to help you structure the policy. For example, if the company is most concerned about non-refundables, place a list of non-reimbursable items within the first page or so of the policy so that it’s hard to miss.

 


Items to Cover in Your Corporate Travel Policy


Download your customizable travel policy template hereThere are many variables that may drive decisions about a company’s business travel guidelines. If you’re the person tasked with writing the policy, you may be involved in quite a juggling act, as you have to balance the needs of employees with the needs of the company. People in HR, operations, and finance will have their opinions as to proper approaches. While we can’t recommend the exact approach that’s right for your company, there are certain items that every policy should cover:

1. Expense categories

The expense categories that you will reimburse travelers for (or that you will allow them to book through a mobile booking tool or company card) will constitute the bulk of your policies. You should list every travel and entertainment (T&E) item that the company is willing to cover, along with any restrictions or guidelines for booking in those categories. For almost all of the categories, you’ll need to tell travelers:

      • any preferred vendors (airlines, hotel chains, rental car providers) through which they should book.
      • the company’s advance booking requirement. Many companies require employees to book hotels and flights at least two weeks in advance.
      • the website, mobile booking tool, and/or TMC the traveler should use to search for travel and if use of the technology or TMC is required or optional.
      • the process for payment. Are there certain categories for which employees should use a company card versus a personal card? Is all booking completed through the mobile booking tool?

In addition to the above common items, there are a lot of other considerations you’ll be tackling that are specific to each expense category. Here are our tips for each category:

AirfareLodgingGround transportationCar rentalsMealsClient entertainment expenses (meals, events)
You’ll likely want to start out with a statement encouraging travelers to book responsibly and affordably. Here’s one we like from the Society for Human Resource Management: “Travelers are expected to obtain the lowest available airfare that reasonably meets business travel needs.” Of course, the word “reasonably” can be interpreted loosely by travelers, which is why you’ll want to spell out further guidelines.

Make sure to:

  • Specify the class of service. You will want to indicate in what circumstances (if any) a traveler can book first class versus economy. For example, you might offer this luxury for flights longer than a certain number of hours and/or for high-level executives.
  • State if employees get to keep their own frequent flyer points or if the company retains them for discounts.
  • Be sure to delineate any expenses that will be the traveler’s responsibility, such as extra baggage fees or cancellation fees.
In order to help you control spending on lodging, you might want to consider providing employees with an average room rate in popular company destinations and asking them to stay close to that range.

Also, be sure to:

  • Define the room type. Most companies require employees to book standard rooms and require that upgrades only be accepted when there is no additional cost to the company. Keep in mind that some standard rooms cost more if there’s an ocean view or other perk.
  • Delineate additional related expenses that will be covered. Determine if the company will pay for minibar charges, Wi-Fi, and so forth.
Ask employees to use sensible judgment when selecting ground transportation options.

Other tips:

  • Consider if you allow ride-hailing apps such as Uber and Lyft. Let travelers know in your policy, and specify details such as if they should not use these apps during surge pricing.
  • Always ask for receipts that include dates.
  • Consider asking employees to use public transportation when convenient.
Booking the lowest logical rate should apply to all expense categories, but it’s an especially good reminder for car rentals because costs can vary significantly depending on car type.

You’ll want to:

  • Specify the size or type of car allowed. Sometimes, specifications are linked to how many business travelers are traveling together.
  • Let travelers know if you require them to purchase insurance with their car rental.
  • 3. Consider use of personal cars. You might need to give travelers guidelines for using their own cars, especially if the company’s business travel is mainly domestic.
Some companies get quite explicit with their meal policies. They might state that they will not reimburse meals for any time after the traveler’s return flight lands. These kinds of policies may seem too strict to travelers, but they will clearly save companies money. So, the decision often comes down to understanding company culture.

Most policies include the following:

  • A requirement that the employee stay within the allowable per diem. The U.S. General Services Administration now offers a useful per diem tool for calculating trip allowances.
  • A statement about alcohol. Some companies only reimburse for alcohol when the meal involves a client.
A business meal is defined in most policies as a meal during which a business-related conversation takes place immediately before, during, or immediately after the meal. It’s very important to remind employees that their purchases should be reasonable and appropriate, as these expenses can quickly get out of hand. Events can also cost a lot of money and should probably require prior approval.

Useful strategies to consider:

  • Specify that the most senior member of the company in presence should request reimbursement.
  • Set spending limits or ranges. If employees go over a certain range, their reimbursement request might need to go to someone higher up than the usual approver.
  • Factor in tips. Most companies cover tips, but some state that they will not cover over 20%

2. Non-refundables

A good travel policy for companies clearly states what items the company will not provide reimbursement for. Some common items that often fail to make the reimbursement cut include:

      • Childcare
      • Dry-cleaning
      • In-room movies
      • Airline change fees
      • Parking tickets
      • Airline preferred seat upgrades
      • Hotel staff tips
      • Toiletries or clothing purchased during the trip
      • Pet boarding

Some of these items may be listed in the expense categories, but it’s useful to have a full list available as its own section within the expense report for traveler ease-of-use.

3. Expense reporting & reimbursement process

While some companies choose to explain expense reporting for each expense category in their travel policy, others offer a separate section describing the expense reporting process. Regardless of which approach you take, there are some common items to address, and even though the expense reporting process varies widely across companies—from paper forms to high-tech mobile T&E solutions—your policy will still likely need to address the following issues:

      • What documentation (forms, receipts) does the company need in order to reimburse the traveler?
      • What is the expected timeline for the traveler to submit expense reports after the trip?
      • How soon will the employee be reimbursed after submission?
      • What happens if employees do not comply with policies?
      • Is pre-approval needed for any expense categories?
      • Who approves trip requests or expense reports, and what’s their contact information?

Unfortunately, some business travelers occasionally fudge the truth on expense reports. In fact, a survey of over 1,000 business travelers by Chrome River in February of 2016 showed that expense reporting fraud costs U.S. businesses more than $2.8 billion per year. One way to reduce expense reporting fraud is to be detailed in the expense reporting guidelines of your travel policy. When asking for proof of payment, you might need to get specific. For example, it’s recommended in Chron.com that businesses “specify if employees need to submit receipts instead of credit card statements for reimbursements” when requesting lodging reimbursement. A credit card statement may only show the entire hotel bill, while the room bill will break down movie rentals and mini-bar expenses, which may not be covered by the company.

Note that many companies set a price for which receipts are required, especially for meals. If a meal request is within the per diem, many don’t require receipts. This makes life a little easier for travel managers/accountants.

4. Safety information

An important goal of any company business travel policy should be to protect the safety of employees. Yet, as the Egencia survey showed, safety and duty fall well below cost-related policies in terms of their frequency in corporate policies. It’s important to delineate any travel safety procedures in your policies to help you accomplish your company’s duty of care. You might consider

  • requiring travelers to submit their itineraries so you know where they will be at all times.
  • asking travelers to leave you their hotel phone number.
  • providing contact information and resources for travelers in the case of different types of emergencies.
  • describing any insurance the company holds for travel.

Some TMCs have tools that allow them to track travelers during their trips. Most tools allow travel managers to collect travel data and itineraries, which aid in locating a traveler within a particular city or region—as opposed to using GPS to constantly follow an employee, according to Buying Business Travel.

An in-depth study by Carlson Wagonlit Travel on travel policy and compliance revealed that 77% of travel managers say they can’t track travelers well in an emergency if they do not use the designated booking channel. More than 1/3 of travelers aren’t aware of the link between emergency tracking and booking through the TMC. Based on this data, if your company uses such a tool, it seems important to remind travelers that booking with preferred vendors increases their safety; to tell travelers how to use the tool; and to address any concerns about privacy.


Pro Tips for Company Travel Policy Content


Download Your Customizable Travel Policy Template Here

Sharing Economy

We suggest that you consider the sharing economy as you plan your travel policy. With increasing numbers of business travelers adopting sharing economy services like Airbnb and Uber, it’s important to let travelers know where you stand on the issue, whether you agree with its use or not. Wolko says, “For the sharing economy, it’s a huge risk in my opinion. The company has duty of care obligations and as a travel manager, I don’t know if the Airbnb house, apartment, or other is safe for our employees.” Wolko’s article, “10 Reasons Airbnb Isn’t Good for Business Travel” discusses some of the risks of allowing employees to use Airbnb, and our two-part series on incorporating the sharing economy into corporate travel policies offers detailed strategies for including the sharing economy in travel policies.

Bleisure

is also an important consideration when crafting business travel guidelines. As more travelers add days to their business trips for leisure time, it’s a good idea for your company to set guidelines that prepare travelers for their responsibilities when engaging in bleisure. Wolko reminds us that “you can save the company money by tacking on a day or two of personal travel on a business trip,” such as when a flight costs less if you’re traveling on a less busy day. Your company might consider allowing personal time as long as it saves the company money or it is clear when the company’s coverage of costs ends and the traveler’s begins.

Hierarchy

Experts debate about whether or not a company travel policy should be hierarchical (meaning, different guidelines apply to different types of workers). Some argue that you should not make the policy hierarchical because it creates animosity and is more difficult to understand. On the Travel and Expense Management Solution Concur’s blog, the company says, “If a salesperson can’t book a $500 room, then a manager shouldn’t be able to either.” Yet, others argue that those who are higher up in the company have earned loyalty and deserve better accommodations or travel upgrades in some cases. We suggest that you explore the pros and cons of a hierarchy with company constituents.


Best Practices for Writing & Organizing the Company Travel Policy


Download Your Customizable Travel Policy Template Here

So, you’ve got all your bases covered: You’ve negotiated with vendors, analyzed company travel practices, and made key decisions about expense category guidelines. You’ve written a list of non-reimbursable items and prepared safety information. The rest should be easy, right?

Yes—and no.

An effective company travel policy is not just about creating effective policies. You also have to communicate them well. Here are our tips for writing and organizing your policy:

1. Include an introduction2. Make the organization user-friendly3. Match your tone to the company culture4. Adapt policies to the corporate booking tool

Aim to write a short introduction to the travel policies that gives an overview of the employee’s most important responsibilities; the purpose of the policies; and the importance of following policies.

This is your chance to communicate the most significant information so employees can’t say they missed it. This is also your chance to help employees understand why the policies matter for the well-being of the company and the employee.

As Tom Wilkinson, former president of TRW Travel & Expense Management and current Director of Supplier Services at Concur, tells Business Travel News, “You earn support for policy changes by communicating not only the what, but also the why.” He suggests that a statement such as “we are required to book online” practically “begs for opposition” UNLESS the company explains the decision as such: it’s “because we will save time and money while protecting travelers on the road.”

Thus, an introduction can become an effective approach towards policy compliance.

Do you remember, in the beginning of this article, when we suggested that you set goals for your travel policy before creating it and that you analyze traveler data? Now is the time to use those goals and data to create an organizational strategy for the policy.

For instance, if your number one goal is to help travelers book travel easily and efficiently, organize the policy based on your travelers. Is airfare the most commonly booked travel expense category? List it first. Try to follow the steps travelers would follow as they book, starting with booking and ending with submitting reimbursement documentation.

Make sure to break up the policy into short, user-friendly sections, and consider an easy-to-follow table of contents that helps travelers skip right to the information they need. Think about ways to use images and design strategies to liven up the policy, too.

Wilkinson argues, “If your policy is out of synch with your culture, travelers won’t follow it and managers won’t enforce it.” This is excellent advice, but perhaps easier said than done.One way to make sure your policy reflects the company culture is to, as Wilkinson suggests, listen to constituents in the company. As you write, keep their preferences in mind. If you determine that you need to allow flexibility in booking to satisfy constituents, then your language will have to match.Let’s look at an example from the travel policy of Seagate, a data storage solutions company:

“All employees must utilize our preferred vendor.”
The use of the word “must” is very clear (as opposed to “should,” which could be misinterpreted or misused), and “utilize” is quite formal. Because there is no ambiguity, a company that is focused on the savings afforded by vendors will find this statement very useful, but a company that wants to allow flexibility and offer a more laidback tone might instead use a phrase such as “We encourage employees to use our preferred vendors whenever possible.”

We’ve argued that you still need company travel policies, even if you use a corporate booking tool. After all, many mobile booking tools require you to input your policies—something you can’t do if they don’t exist. The policy will still be used to guide the selections you make in the mobile tool—and you’ll have to have policies in writing in case the mobile booking tool does not have options for certain preferences or in case a travel wants to see the policies.

Some mobile booking tools specialize in company travel policies, making it very easy for employees to remain in compliance. Our own product, Claire, allows companies or TMCS to select very detailed policies, and once they’ve done so, travelers simply view available bookings that are within policy. Here’s the hotel policy, which allows the user to select items such as a max rate per night or cost per diem and a preferred room type.

While you should still have a policy even if you use a new technology for booking or reimbursement, make sure to study the booking tool and figure out what items you can eliminate. For example, while we suggested asking employees to submit an itinerary for safety purposes, you could omit this reminder from your policies if the mobile app tracks travelers or stores itineraries.

 

Getting the Word Out to Employees About Company Travel Policies

You’ve conquered the task of creating or updating your company’s travel policies, but your job isn’t done quite yet! If no one knows about the policy, then all that effort is pointless.

The Egencia survey found that business travelers prefer to find policy information on the company intranet, booking tool, or from a travel arranger—as opposed to through email. This information proves that it’s useful to put up your travel policy on the company intranet; to set up the policies in your mobile booking tool; and to make sure that travel arrangers have this information easily accessible. Yet, we think the more you get the word out the better. Even though only 13% of travelers in the survey said that email was their preferred method of communication for the policy, it’s worth publicizing via email to reach that percentage.

Download your customizable travel policy template here

Travel Policy Compliance

A final reminder for creating an effective travel policy is to think about the policy as an evolving document. Employees’ needs will change; new technologies will emerge. These will undoubtedly affect your policies, so keep an open mind and keep it updated. As technologies take over more aspects of your policy, the shorter and simpler you’ll be able to keep the document!

 

Also remember to keep employees’ comfort and safety in mind as you update your policies. If you only focus on costs, employees may not comply with the policies. In fact, the Egencia study showed that 54% of travelers believe cost is the most important factor to their company when booking travel. Egencia argues that travelers aren’t willing to “embrace policies that cost them in time or comfort or cause unnecessary hardships when they are away from home.” Traveling for business can be fun, but it can also be stressful and lonely. Keep this in mind throughout the policy creation process.

For more tips on compliance, check out our article, “Improve Your Company’s Travel Policy Compliance with These 5 Strategies.”

Jenna Sheffield

Jenna teaches college-level writing courses at the University of New Haven, and she regularly freelances for 30SecondsToFly. When she’s not writing or teaching, she can be found traveling, running after her toddler, and/or enjoying some mac & cheese.

  1. A really good and comprehensive article that also covers WHY compliance benefits the traveler as well as the company. Most companies do not do a good job of communicating this to their travelers.

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