How to write an effective corporate travel policy

PeopleImages.com – Yuri A // Shutterstock Whether it’s for sales meetings, trade shows, or conferences, travel is important for any business. But with increasing costs and a remote work model, corporate travel has become more complicated than ever. This is why a corporate travel policy, or a set of guidelines to ensure your team is efficient with costs, understands their limits, and stays safe while on the road, is essential. ‍But whether you’re creating a new corporate travel policy from scratch or revising a pre-existing one, there’s a lot to take into account. Here, Ramp walks you through the purpose of a corporate travel policy and what it should include, plus tips to encourage adoption in your organization. What Is a Corporate Travel Policy? A corporate travel policy is a document that describes a company’s policies and procedures for approving, booking, and expensing business travel. These guides typically cover topics like: Booking guidelines and preferred vendors for transportation and lodging Approved software for managing travel bookings and expenses Guidelines and approval process for out-of-policy travel spend Covered and non-covered travel expenditures The travel expense reimbursement process Trip extensions for personal travel Business travel insurance details Duty of care procedures and emergency contacts In doing so, a travel policy sets consistent standards for everyone in the organization–including executives, managers, finance teams, and business travelers–regarding business travel. How to Write a Corporate Travel Policy Since a corporate travel policy should reflect a company’s culture and travel program, every company’s policy will look slightly different. But the approach will be consistent. These are four steps to getting started: 1) Define your goals Before starting any project, you want to know why you’re doing it. What are the business goals you’re looking to achieve by documenting your corporate travel policy?  If your top priority is keeping costs down, then you know to put an extra emphasis on that section and make sure there is enough specificity to meet those goals. If your team needs to travel internationally, you should make sure to understand policies around work visas, exchange rates, travel safety. 2) Understand your team’s needs Since your employees are the ones actually going on the trips, you need to understand what their needs are. Consult your team to get a sense of the current process for booking and approving travel. What’s working and what’s not? While meeting your business goals is crucial, it’s just as important to take into account the real world experience your team has with travel, which will ultimately result in a better understanding of the policy and overall morale.  3) Create a draft of your policy Now you’re ready to put pen to paper. Make sure the policy is written in a clear and concise way that leaves no room for ambiguity. Read on for more detail below about the sections to include, but make sure to cover: Policies for booking travel Preferred vendors Budget and expenses, including reimbursement Policies around domestic and international travel Emergency protocols 4) Communicate and iterate on your policy Lastly, you need to share your new policy with your employees. To ensure compliance, don’t just send via an email or company Slack channel. Offer workshops or trainings, if there are pieces that are more complicated. Make sure the policy is easily available wherever you store documents or is programmed into any automated travel expense tools you’re using.‍ Once in place, schedule time to regularly review and make sure your policy is up-to-date. The world of travel changes frequently, so this should become a living document you iterate on over time. What Should Be Included in Your Corporate Travel Policy? Now that you understand the process of writing your corporate travel policy, what exactly should be included? While the specifics will vary from business to business, all comprehensive travel policies should include the following sections: Travel booking procedures Explain how your employees should book travel for business purposes. Do they contact an in-house travel manager or your company’s preferred travel agency to start the booking process? Or are they allowed to self-book using travel management software? Can they use a personal credit card, or should they use a corporate card?  Walk them through the steps they should take and provide them with any resources they’ll need, for example, login credentials for your organization’s travel management tools or information for their point of contact. Mention any preferred vendors for air travel, accommodations, or car rentals here, and include incentives for rewards or loyalty points as well.  Air travel guidelines Help control your company’s travel expenses by creating guidelines around how employees book and manage air travel. For example, many companies allow travelers to book business class for long-haul flights–just make sure to specify what conditions the traveler or flight must meet to qualify. List any exceptions you make for executives or other leaders here, too.  Lodging guidelines Ideally, you want to give employees the freedom and flexibility to book accommodations that meet their travel needs as long as they stay within policy. You might set limits on hotel star ratings or nightly room rates, for instance, while giving them free rein over the other aspects of their stay.‍ Consider whether employees are allowed to book rentals through Airbnb or Vrbo, or if you require them to book standard hotel rooms only. And be sure to detail if your company covers Wi-Fi, room service, or dry cleaning charges. Expense categories Here, list which business travel expenses are allowed and which explicitly aren’t to reduce out-of-policy spend. Organize this section so it’s easy for business travelers to find the information they need at a glance. Also make sure to include the process employees must follow to request and get approval for out-of-policy expenses.‍ Here are some expense categories to consider adding to your travel policy: Entertainment: This category covers meal expenses, drinks, and other incidentals accrued while entertaining clients on business trips. An easy way to handle entertainment expenses is to give travelers a daily allowance or per diem and then offer specific guidance on whether your company covers the cost of alcoholic beverages under your travel policy. Ground transportation: Can travelers expense Uber rides or rental cars? Are there any daily spending limits or restrictions employees should keep in mind? Do they need documentation to get reimbursed for expenses over a certain amount?  ‍Phone use: Phone charges are another business expense employees often incur while traveling for work. Employees traveling internationally may incur roaming charges while making phone calls to clients or their managers, and even domestic travelers may need to pay for Wi-Fi to work effectively on the road.  Non-reimbursable expenses: Setting these expectations with travelers well ahead of time helps reduce misunderstandings and out-of-policy spend. Generally, non-reimbursable expenses are things like late fees, personal grooming appointments, pet boarding, travel expenses for spouses or other family members, and any other personal expenses.  Expense Reporting and Reimbursement Dedicate a section of your travel policy to explaining their expense reporting and reimbursement process. Reduce employee questions and concerns by clearly describing every aspect of the process, including: What information employees must have when filling out a travel expense report Whether they need to submit original itemized receipts along with their report How much time employees have to submit expense reports  Where to submit completed expense reports The general time frame to receive travel reimbursements and through what payment method Travel Safety and Support In your corporate travel policy, explain what safety measures you take to protect travelers and any actions they should take to reduce their risk while on the road.  Don’t forget to include points of contact, procedures, and any other instructions travelers should have in case of an emergency. What should they do if they get into an accident? What can they expect in the event of a flight cancellation? Provide specifics on your company’s travel insurance coverage so employees understand what’s included.  Guidelines for International Business Travel If you book both international and domestic business travel, consider creating separate guidelines for each. This will help fine-tune your policy to the unique needs of this type of business trip.‍ For example, airfare for international flights is generally higher than domestic airfare, so your budgetary restrictions for domestic flights may not apply to international bookings. Alternatively, to avoid the price hikes that often come with last-minute bookings, you may require employees to book international travel arrangements further in advance than domestic business trips. Considerations for Remote and Hybrid Employees  Now that many companies have adopted a remote-first, hybrid, or distributed work environment, it’s even more important to adapt your travel policy to the changing needs of your organization and workforce.‍ Thighs to consider are: Types of meetings allowed for travel Frequency of travel to an office Permissible types of transportation Per diems Permissible accommodations  And with many remote employees bringing their work with them as they travel the world, your company can capitalize on this trend by turning bleisure travel into a company perk. Be sure to include guidelines if you support this sort of arrangement.‍ Best Practices for a Business Travel Policy An effective corporate travel policy simplifies business travel. The best policies encourage your team to make cost-effective booking decisions while still giving them some autonomy with their travel plans. ‍ A business travel policy also supports finance teams by curbing out-of-policy spend, streamlining the expense reimbursement process, and simplifying how they track and report on travel expenses. With more accurate data at their fingertips, leadership teams can make more informed decisions about the effectiveness of the company’s travel initiatives. But, no matter how much effort you put into your corporate travel policy, it’s only as effective as the number of employees who follow it. The simplest and most effective way to increase compliance with your travel expense policy is to make it as easy as possible for the people who use it. Below are a few other easy things any company can do to increase policy compliance: Include a comprehensive FAQ section: Dedicate a section of your travel policy to answering the most common questions about your company’s guidelines and procedures. You can direct any first-time business travelers to this section of your policy whenever one of these FAQs inevitably comes up. Use travel management tools: Automated travel management tools don’t just offer immediate benefits to travelers and their supervisors. These apps support all areas of your organization, from executives and travel managers to human resources, finance professionals, and other stakeholders. Communicate the policy during onboarding: There’s always a learning curve when you join a new company, so add your corporate travel policy to the upfront training team members require during onboarding, and you can ensure compliance from the jump. This story was produced by Ramp and reviewed and distributed by Stacker.