Establishing Travel Policies: A Guide for Managers

A travel policy is important for any business that frequently meets with long-distance clients or other related parties. It covers important details such as travel expenses, requests and arrangements, which gives employees a guide for best travel practices. Learning about what to include in a travel policy allows you to create clear guidelines that all employees can follow.

 

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What is a travel policy?

A travel policy is a set of guidelines that outline how to handle business-related travel. Guidelines include how to submit travel requests, how to book flights and accommodations and how to receive reimbursement. In some cases, policies outline ways to keep travel costs low or include a list of approved airlines and hotels employees should use. Having a system in place effectively manages costs while reimbursing employees in a timely manner.
 

See 14 more policies your business should have.

 

Elements of a travel policy

Consider the following elements when creating your travel policy:

 

Expenses

Decide which expenses you want to reimburse. Common reimbursable items include: 

  • Lodging
  • Airfare
  • Meals
  • Rental cars
  • Client entertainment
  • Dry cleaning
  • Taxis
  • Travel documents like visas

 

Non-refundable items

Be clear about the charges you won’t cover in your policy, such as:

  • Flight upgrades
  • Childcare or pet sitting
  • Personal entertainment 
  • Parking tickets
  • Alcoholic beverages
  • Lost baggage
  • Late or cancellation fees
  • Credit card interest

 

Expense reporting and reimbursement

Outline the documents employees need to submit with their expense report. They need to list all of their expenses and any supplementary details, like the time, date and location of the expense. Employees also need to include any receipts or invoices as proof. Use these documents to compare the amount you approved to their actual expenses. 

 

Safety

Policies outline any safety procedures employees need to take, including outlining itineraries or reporting their current location at certain times. Setting these procedures protects employees and your business from harm.

Related: How to Manage Employees

 

How to establish an effective travel policy

The following list of steps outline how to establish an effective travel policy for your business:

 

1. Define your scope

Determine if your policy covers all employees or only certain ones, like salespeople or department managers. Consider part-time, full-time and contract employees too. In your policy, clearly define which employees are covered to reduce misunderstandings. 

You also need to determine if it’s necessary to issue a per diem for expenses like meals. Giving a set per diem amount means you and your employees don’t need to track as many expenses for reimbursement. If you plan to give a per diem, list the amount in your policy so employees can better prepare for their trips.

 

2. Create methods for travel requests

Dedicate an individual to manage and coordinate all travel, including requests and reimbursement. An office manager or administrative assistant is ideal for managing travel since they handle most scheduling requests. Address specific time frames for submission requests, outline how to submit the request, define how long the process takes and explain how to submit changes to a request. 

 

3. Establish processes for transportation and accommodation

Establish and explain clear budget limitations for travel expenses. Outline specifications in three primary sections: airfare, ground transportation (including rental cars and public transit) and lodging. It’s important that you find a balance between affordability and employee satisfaction. Consider how costs change depending on the location the employee travels to. For example, give a larger budget for employees traveling to metropolitan areas where accommodations are more expensive. 

 

4. Set an allowance policy for meals and other expenses

When addressing secondary expenses, define differences between personal meals, business meals and entertainment expenses while meeting with clients. Identify what qualifies as a personal or business meal, explain reimbursement requirements for meals and address how you plan to approve entertainment or leisure expenses. Set a limit for food per meal or per day so employees know exactly what they can spend. 

 

5. Create guidelines for expense reporting

Along with your policy, create a form that employees fill out either during or after their trip in which they list all expenses accrued with supplemental details. Additionally, for employees requesting reimbursement, provide as much information as possible that guides them through the process. 

Related: Unlimited Vacation Policy: Why Employers Should Consider It

 

Business travel and expenses FAQs

Here are some frequently asked questions and answers about travel policies: 

 

Why is a travel policy important?

A travel policy gives cost control over employee work trips. It defines how much employees can spend on each aspect of the trip, making it easier for you to set specific budgetary goals. Since they also include safety guidelines, they make employees feel more comfortable throughout their travel. 

 

Who should have a travel policy?

Travel policies are primarily for companies that have employees who travel often to meet clients or perform site visits. Sales and marketing professionals usually travel more than any other type of employee. Businesses with more than one location also have an increase in travel among employees. Even if you only have a few employees who travel often, it’s a good practice to establish a policy that they can follow. Meet with your employees to establish a guide that addresses all of their needs and concerns. 

 

Should you offer reimbursement or a per diem?

Most companies use travel reimbursement policies since they can pay the employee back for the exact amount they spent. Giving employees a per diem for travel is an option if employees aren’t comfortable spending their own money upfront then waiting for reimbursement. Gauge how your employees feel about these options before implementing a policy. 

 

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