How to Create an Effective Corporate Travel Policy
Creating a corporate travel policy from the ground up can be daunting. We’ve made a travel policy template in hopes of taking some of that pressure off of your plate.
What is a Corporate Travel Policy?
A corporate travel policy is a set of guidelines to help traveling employees make smart decisions when scheduling their business travel. A corporate travel policy has the potential to keep business travelers within a specific budget for their flight, lodging, meals, and entertainment expenses. For the finance team, this type of policy helps with budgeting and forecasting for your company’s monthly and annual travel spend.
Lola.com created a free, downloadable corporate travel policy template to help make this process a bit easier. But first, let's go over the basics.
Corporate travel policies are not one size fits all. You will need to take into consideration specific aspects of your company, like number of traveling employees, employee preferences, and budget size, when deciding on the specifics of your policy. Before you get into the custom details, it’s important to understand the foundational elements of a corporate travel policy.
The most crucial part of a travel policy is clarity about which expenses are covered, including specific dollar amounts, and which are not reimbursable. You want your employees feel prepared when swiping the company card on the road. Still feeling a little lost? Here’s an overview of the necessary elements.
Here you need to outline exactly how much employees can spend on flights and flight additions. What type of flight should they be buying — Basic economy? Standard Economy? First class? If there are any special cases, like for longer flights, make those clear here as well.
Hotel costs are highly dependent on location, amenities, and time of year. Give your employees a per night price range and some specific hotel chains to target. Again, special circumstances might necessitate some flexibility here as well, so make those cases clear. Do you allow employees to expense additional charges like snacks and movies? They should know the answer before leaving for the trip.
Meals and entertainment
Need some guidance on how much to allow for each meal? The U.S. General Services Administration (GSA) sets guidelines for per diem rates each year. The rates are based on location, and your employees can easily look up the per diem for their destination.You also have some control over what and how much you want to cover for your employees.
Will you have your employees using ride sharing apps or car rentals? Or do you leave it up to them? These are the questions that you need to answer in this part of your travel policy. Our template offers a few more guidelines on how to choose the best processes for your company.
Many people like to add leisure travel to the end of their business trip. Ask employees to document when they are adding personal travel onto the end of a work trip. Their plans are important for you to know in order to track their PTO and know the duration of each part of the trip, work and bleisure. As soon as their personal travel starts, employees should be using a personal credit card, not the company card.
International travel introduces a few additional complexities. When employees are traveling abroad, you may have to deal with Visas and immunizations. Make sure that employees understand which documents they will need for their international travel, and encourage them to get those organized sooner rather than later. Your policy should indicate which of these requirements the company will pay for, and instruct employees on how to charge those expenses.
Throughout each component of your corporate travel policy, articulate how much employees can spend, how they should pay for it, and who they need to send the information to.
Once you have a corporate travel policy outlined, make sure that employees know it exists, know what it is, and know where to access it. Ultimately, using technology to help enforce your corporate travel policy is your best bet. With a streamlined travel management software, your traveling employees can see whether or not their choices are compliant with your policy during the booking process.