The Ultimate Guide to T&EBy Rebecca Morrison
Whether you want to build a travel-and-expense (T&E) policy from scratch or optimize the one you currently have, this guide will help you accomplish your goal.
Business travel can be rewarding for travelers, but is also a logistical challenge for a company’s finance team. Tracking expenses is just a part of conducting traveling for work and it shouldn’t be a headache. In this guide you’ll learn:
- The elements of a corporate travel and expense policy,
- How to develop a T&E policy, and
- Tools and resources for T&E management
The elements of a corporate travel and expense policy
First things first: what is a travel and expense policy? T&E policy guides employees on how they can spend money on work-related purchases or purchases made while on business travel. Oftentimes a company’s T&E policy and corporate travel policy are packaged together because they are interrelated.
Having a good travel and expense policy is important for several reasons. First, it keeps the company's budget in check. When travelers know what they can and cannot spend company money on, and what they will and will not be reimbursed for, they can make smart purchasing decisions. Second, a clear T&E policy speeds up the reimbursement process. When employees understand what they can and cannot get reimbursements for, they can file expense reports quickly, which is beneficial for both the accounting team and the employees requesting reimbursements.
So what are the elements of a corporate travel-and-expense policy? Here are key topics to cover in yours:
- Travel - Include spending limits and preferences for flights, trains, buses, etc. For example, you may allow your travelers to fly in premium economy on flights shorter than five hours, and in business class on flights longer than five hours.
- Accommodations - Include spending limits for each country or city during various times of year.
- Food allowance - Refer to the GSA’s guide on per diem rates to see what a reasonable allowance is for meals in cities around the country.
- Corporate credit card policies - Create guidelines for who gets access to the company card, when it can be used, etc.
- Reimbursement policies - Explain how employees can get reimbursed for out-of-pocket spending.
- Telephone usage expenses - What type of telecommunication costs will the company cover?
- Mileage counting and reimbursement policies - When employees drive personal cars for work, how should they count how much they drove? What do they have to show to get a reimbursement for this expense?
- Parking - If someone drives their car to a business meeting or conference, where can they park? Do they have to look for free street parking or will the company pay for valet?
- Resources for safety while traveling - What to do in case of a missing credit card or how to handle unexpected travel advisories.
The more thorough your T&E policy, the more easily it will be adopted.
How to develop a corporate T-and-E policy
Before you begin to develop a corporate T-and-E policy, it’s important to explore several questions that will help make your policy a success.
First, who will use the T&E policy? Will it be junior associates who are jetting away every week, or vice presidents? Will you need separate policies for different teams and ranks? If not, how can you write the policy so that it’s applicable to and understood by everyone at the company?
Second, what’s the overall budget for T&E? How is the budget divided? By department, by individual, etc.?
After you’ve created the policy, how will you share it with the company? How will you make it accessible to travelers on the go? Will there be a mobile version of the policy?
Once you’ve discussed these considerations with key stakeholders, it’s time to develop your company’s T&E policy. Follow these steps:
- Look at examples of other T&E policies. This exercise will give you a sense of how detailed yours should be, will give you an idea of the format you should use, and will help you come up with comparable rates. This T&E policy from GuarantCo is a comprehensive example.
- Use a tool that will help guide you as you write your T&E policy.
- Test it out. After you’ve created your T&E policy, share it with an internal focus group consisting of employees from different departments. Ask them if anything is unclear.
- Finalize with feedback. After you’ve received feedback, incorporate it into the policy.
Remember that your company’s T&E policy is a living document and should change with the times and with your company’s needs. Update it when appropriate.
Tools and resources for T-and-E management
After you’ve released your T&E into the wild, consider equipping your team with T&E management tools to maximize efficiency.
These are the top tools and resources available for T&E management:
- An expense management tool helps business travelers save receipts virtually and on the go to speed up expense travel reporting.
- Corporate travel booking software with expense software integration can help keep your travel expenses organized and can automate expense reports. As a travel app, it can also keep track of your itinerary and provide business travelers with support and safety while traveling.
- A virtual credit card lets employees make purchases safely and lets your finance team track spending to keep it under control. Most virtual credit cards also come with software that helps manage and build a budget.
- A policy template and white papers to help your business travelers and corporate travel managers manage expenses efficiently.
Creating and managing a T&E policy shouldn’t cause anxiety. By looking at examples of other policies, knowing which elements to include, and breaking the process down into steps, you’ll be on your way to creating a successful T&E policy in no time.