How to Write a Corporate Travel Policy in 2019

A corporate travel policy is a document that establishes guidelines and procedures for every aspect of corporate travel within your organization. From submitting a travel request, to booking flights and hotels, through to submitting expense reports for meals and entertainment, a corporate travel policy provides an accountable and consistent standard for controlling costs while employees are traveling on company business.

In addition to placing restrictions on transportation, accommodations and entertainment expenses, corporate travel policies may set guidelines for employee conduct when they represent your organization abroad and establish record-keeping requirements for reimbursement claims. A corporate travel policy allows your organization to hold individuals accountable for their travel and entertainment spending, but it should also act as a manual for how your employees can solve problems while traveling (within company policy).

Writing a Corporate Travel Policy in Seven Steps

A corporate travel policy sets limitations on expenses and reimbursements for corporate travel and helps your organization hold employees accountable for their spending while traveling on business. Here's how to set up a basic policy that will help your organization start controlling its travel costs.

Define the Scope of Your Policy

The first step to creating a corporate travel policy is to define the scope of the policy. Does it apply to all employees at your firm? Could it also apply to contractors? Make it clear that everyone is required to comply with the travel policy and identify whether there are any exemptions. You may also choose to include a policy statement that describes the purpose of the corporate travel policy. 

Create Processes for Requesting Travel

The corporate travel policy should define a clear process for requesting travel. A dedicated travel manager should be responsible for coordinating and approving travel requests. You will want to answer questions such as:

  • When must employees submit a travel request to the travel manager?

  • How should travel requests be submitted? In what format? What information should be included?

  • What is the approval process for travel requests? How long should it take?

  • When should changes to an approved travel request be reported to the travel manager?

  • Are there any automatic dis-qualifiers for a travel request? Any countries to which travel will not be permitted (i.e. countries identified on the United States embargo list)?

Establish Booking Processes for Transportation and Accommodations

Once an employee has proposed a travel itinerary that is approved by the Travel Manager, the next step is to book transportation and accommodations for the trip. Airfare and hotels are two of the largest expense categories for corporate travel, so it is crucial that organizations establish clear policies that limit booking costs while maintaining employee satisfaction. To make it easier, we've highlighted the most important questions to answer and arranged them by category. 

Airfare

  • Will the employee book the flights or will they be booked by the travel manager?

  • Will the flights go on the company credit card, or will they go on the employee's credit card and be reimbursed.

  • How will cost restrictions be applied to flights?

  • How far in advance should employees book airfare?

  • How should employees search for policy-compliant airfares? What travel agencies or search tools should they use? 

  • Will the company reimburse ancillary fees, such as seat upgrades, preferred seating or early boarding?

  • Will the traveler provide their own insurance or be covered by the company's business travel accident insurance?

  • What happens if the traveler misses their flight? What if they lose their ticket? What if they need to cancel or change a reservation?

Ground Transportation 

  • What forms of ground transport is the employee permitted to use? Car rentals? Local taxi services? Application-based ride-sharing services?

  • What expenses are permitted and what are the reimbursement limits?

  • Should the expenses be charged to the company credit card, or paid by the traveler and claimed on an expense report?

  • Does the company cover parking costs? Toll road fees? Parking tickets? In what amounts?

Who is responsible for booking travel at your organization? Some organizations have a dedicated travel manager who coordinates bookings, but employees may prefer to book their own airfare and accommodations when possible. We think that employees should have the freedom to make their own travel arrangements, as long as they comply with the corporate travel policy.

Who is responsible for booking travel at your organization? Some organizations have a dedicated travel manager who coordinates bookings, but employees may prefer to book their own airfare and accommodations when possible. We think that employees should have the freedom to make their own travel arrangements, as long as they comply with the corporate travel policy.


Hotels

  • Has the company negotiated preferred rates with specific hoteliers? Which ones?

  • What are the cost restrictions for daily hotel bookings?

  • Will the employee book hotels or will they be booked in advance by the travel manager?

  • Should hotel bookings be charged directly to the company or submitted on an expense report?

  • Will the company cover ancillary expenses, such as valet parking, room service, in-room Wifi, etc?

Set Allowances for Travel Meals and Entertainment Expenses

Your corporate travel policy should distinguish between the personal meals that employees need while traveling and business meals or entertainment expenses incurred while meeting with clients. The section on meal and entertainment allowances will answer questions such as:

  • What qualifies as a business meal versus a personal meal?

  • Under what conditions are meal expenses reimbursable?

  • How will daily meal allowances for traveling employees be defined? 

  • When should employees submit receipts to claim a meal expense?

  • When do entertainment expenses require approval? Is there a cost restriction on entertainment expenses for traveling employees?

Define Non-Reimbursable Expenses

Beyond transportation, accommodation, meals, and entertainment, employees may incur additional costs while traveling that should be accounted for in the corporate travel policy. Your organization may choose to cover things like overseas telephone expenses, and you should provide guidelines for employees in case they experience a medical emergency while traveling on company business. Should they contact your HR department or their health insurance provider? How will you assist with any sickness or injury experienced by a traveling employee?

Your corporate travel policy should also highlight expense categories that are not covered by your organization. These often include:

  • Babysitting fees

  • Airline service upgrades

  • Hotel perks such as room service, movie packages, etc.

  • Car rental perks such as a vehicle or feature upgrades

  • Interest or credit card late fees

  • Lost or damaged personal items

  • Alcohol (exceptions made for business entertainment)

  • Over-the-counter drugs

  • Parking tickets or moving violations in rented vehicles

Create Guidelines for Expense Reporting

When employees travel for business, they need our assurance that as their company we'll be picking up the tab for their eligible policy-compliant expenses. The company needs to establish what expense categories the company will cover, and in what amounts, but should also publish a procedure for expense reporting that tells employees exactly what information they must provide to get their reimbursement as soon as possible. Expense reporting guidelines should answer common questions like:

  • When should expense reports be submitted? How soon after a trip? When is the deadline?

  • What is the standardized format for expense reports?

  • Should the expense report be approved before submission? Who should approve it? Where should the approved report be submitted?

  • Should expense reports be itemized? What level of detail is required?

  • What receipts must be provided?

  • How will reimbursements be provided (on the employee's paycheck, on a separate check, etc.)?

  • How long will your company take to process the expense report?

Employees should be required to submit receipts for claimed expenses before they can be reimbursed. The requirement for itemized receipts creates accountability for travel and meal expenses and helps control corporate travel costs throughout your organization.

Employees should be required to submit receipts for claimed expenses before they can be reimbursed. The requirement for itemized receipts creates accountability for travel and meal expenses and helps control corporate travel costs throughout your organization.


Add Anything Else Important 

Every organization is different, so you should strive to build a corporate travel policy that is unique to your business and caters to your specific needs and circumstances. A corporate travel policy, once created, is never set in stone - it is a living document that can grow and evolve with your company. As you learn more about how to effectively control costs and improve employee satisfaction with respect to corporate travel, you may choose to update your existing policies or add new ones that reflect your growing knowledge and the increased maturity of your organization.

Automate Compliance with Your Corporate Travel Policy

Deem is making it easier for organizations to increase efficiency and reduce the cost of their corporate travel programs by automating compliance with corporate travel policies through a proprietary corporate travel booking platform. With Deem, your traveling employees can quickly and easily book their own flights and accommodations on-the-go, and you'll benefit from built-in policy compliance and cost controls.

Each year, Deem's customers save millions in aggregate on airfare and accommodation bookings. Request a demo today and find out how much you could be saving.