From preventing costs from ballooning out of control to capturing crucial itinerary details for duty of care purposes, having a corporate travel policy is a basic necessity for any company with employees traveling for business. Each organization must craft its own version of a travel policy based on the culture of the company and the goals of the travel program, but here are some topics to address in a travel policy to help travel managers who don’t have one get started.
Travel requests/pretrip approvals
To avoid unnecessary T&E expenditures during business travel, consider implementing a pretrip approval process in which employees must submit a travel request to an approver, usually a business unit leader, to confirm the appropriateness of each business trip and sign off on it before travelers can make their reservations. Be sure to outline which pertinent details travelers need to include when making trip requests, such as the destination, dates of travel, the purpose of the business trip, and estimated costs (which can be calculated using our smart booking tool, Neo™).
The travel policy also should have a section on how to book trips and explain not only if it should be done through the travel management company’s online booking tool or another platform but also why it’s so important to make in-policy bookings for duty of care purposes (see below). You also may wish to define how far in advance employees must make travel arrangements for the ultimate savings on airfares and hotel rates.
Depending on your organization’s annual travel spend, you may or may not have special arrangements with select travel suppliers (airlines, hotels, car rental agencies, etc.) to send a certain amount of business their way for additional discounts and perks. If you do have such written agreements in place, explain to employees in the travel policy that’s it’s vital they book with these suppliers to maximize savings.
In addition to encouraging employees to book with the company’s preferred airline carrier(s), implement rules to your travel expense policy on what kind of seat class employees can book. For instance, what circumstances, if any, can a traveler book business class? Does this extend to all business travelers or just your top executives? And when can travelers book premier economy over economy?
With the rise of unbundled fares in the airline industry, also state whether or not amenities that traditionally were included in the airfare but no longer necessarily are (such as checked luggage, meals and in-flight entertainment) will be covered by the organization.
You also may wish to define other cost-saving measures, such as when to take a connecting flight vs. nonstop and how many hours before/after the requested departure time they should book if a lower fare is found.
In addition to promoting your hotel guidelines — whether that’s booking rooms with preferred suppliers only or not surpassing a rate cap by city — you also might specify that only standard rooms can be booked and which incidental expenses, such as in-room Wi-Fi, room service, valet parking, late checkout/early check-in fees and hotel dry cleaning, are reimbursable.
If offering rail as an option, spell out when employees may book business class vs. coach or express vs. regional.
There also should be guidelines in place on how travelers should get from Point A to Point B once they arrive at their destination — when taxis can be used as opposed to more economical modes of transportation (airport shuttles, subways, buses, etc.).
To keep costs down, we recommend only allowing employees to rent a car when taxi service and public transportation are unavailable or are too expensive. For rentals, denote the class of vehicle employees can procure and how other costs, like fuel, tolls and parking, will be covered. Be sure to include details about auto insurance coverage and information about whom to call if a traveler gets into an accident.
Per diem Business Expenses
You’ll need to inform employees what their daily allowance for meals, gratuities and incidental expenses is. Many U.S. companies base them on the per diem guidelines set by the General Services Administration for U.S. cities and states and those established by the U.S. Department of State for foreign countries.
You also might spell out in this section your policy on alcohol, if and when it will be paid for by the company (for instance, when entertaining clients) and about duty of loyalty.
Payment and reimbursement
The policy should explain how travel costs should be paid for — whether through a centralized corporate account, the employee’s own personal credit card or a mix of both — as well as how travelers should submit their expenses for reimbursement, including what kind of forms and receipts are required, the deadline for submission and the length of time it will take to be reimbursed.
You also might outline the scenarios in which a traveler will not be reimbursed, like when they make out-of-policy choices or need to rebook a trip due to their own negligence.
Travel risk management
Because it is so important for a company to prepare their travelers for a crisis situation as part of its duty of care obligation, we suggest devoting an entire section to this topic and clearly outlining what they should do in an emergency.
Be sure to encourage (or even make it mandatory) that employees book travel using the company’s approved online booking tool so that all their itinerary details, including hotels, are captured and that they make sure all their emergency contact details are up-to-date in their profiles.
You also will want to spell out the travel risk management procedures both the company and travelers should follow when a crisis arises.