The MacNair Travel Leadership Blog

How to Establish a Corporate Travel and Expense Policy

Posted by Mike MacNair on Sep 3, 2015 8:00:00 PM

establishing_a_travel_policyIn our MacNair Travel Leadership blog, we talk a lot about saving money, controlling costs and how a travel management company can help you do that. If you’ve kept up with my posts, you already know that the travel and entertainment line item in your company’s budget is the second largest controllable expense in your company. And one consistent thread through all of this talk of cost savings? Establishing an effective travel and expense policy.

According to the Global Business travel Association (GBTA), setting a clear corporate travel policy and enforcing it consistently are two of the most important steps you can take to reduce travel costs. Your travel policy is the engine that drives everything related to your travel management process, and works to balance the needs of your employees who travel, with the needs of your business. Once the details are clearly stated, communicating this important document to your employees is essential.

Define Values

One of the first steps to developing a travel and expense policy is to clearly define your values and expectations for travel as an organization, while keeping in mind your company’s travel culture and the potential inconveniences of travel. This ensures that your business is driving the program, and your travelers’ needs are commensurate with their status and requirements for travel.

Benefits of a travel and expense policy

What are the benefits of establishing a travel and expense policy? A clearly defined corporate travel policy will ensure that you avoid ambiguity in travel procedures, and that the organization is maximizing the efficiencies and value of each one of the following key benefits:

  • Savings. An effective corporate travel policy will help your organization realize maximum savings within your travel and expense program. By defining price thresholds and guiding travelers to the right buying decisions on spending limits for all trip components, you are ensuring that purchasing decisions are based on the organization’s needs. In addition, data collected from your travel procurement system can highlight where savings potential is still available. 
  • Support. Your travel policy should align with and support the culture of your company. When your company values are inherent in this document, both management and business travelers have an easier time enforcing and following the policy.
  • Productivity. Defining specific processes and procedures that relate directly to travel, i.e. looking, booking, expense reporting, etc. enhance overall productivity. With an effective policy in place, the most useful and correct data is collected to improve processes, therefore improving productivity.

Communication is Key

Once your policy team or your travel management company has led you through the process of writing and establishing your travel and expense policy, your employees need to hear about it. Communicating this policy is essential for its success. Following are recommendations on how to successfully launch your travel and expense policy:

Set goals and objectives. Develop a “travel squad” that includes people who are impacted by travel from throughout your organization. Once this group is in place, set goals by collecting national data regarding travel policy from a benchmarking organization like Topaz International. Then instruct this group to then determine what is and is not working in the departments touched by travel, such as finance, executive team, human resources and project management.

Keep it simple. The policy should be “…automated, brief and clear,” according to the Business Travel News’ 2015 Business Travel Buyer’s Handbook. Employees should be able to read and understand the main points of the policy in 20 minutes or less. And make it easily accessible via your intranet or email - employees should find it in less than three minutes.

Relax restrictions. If you’re launching a first travel policy or making significant changes, don’t be too restrictive. This can make it difficult for your travelers to adopt. Instead, implement logical policies and procedures, and use your travel squad feedback and data to evolve your policy over time.

Launch it well. Your first impression is the most important. Just like you would with any other company policy, add helpful links, videos, and consider a webinar briefing for onsite and remote office personnel.

Listen. Gather input on the policy from all applicable departments, including legal, human resources, finance procurement, senior management, etc. Engage in productive discussion about the reasons behind policy questions and adjust accordingly.

Stand behind it. Ensure executive team buy-in and enforcement, and gather feedback on why people are not following procedure. Without support and enforcement from the top down, the policy falls apart and benefits are lost. Ask why your travelers aren’t using it, and make changes as needed.

Just like any other policy or procedure within your organization, an effectively written and communicated travel and expense policy can save you time and money. In addition, employees who travel have clear expectations of how, when and with whom they should book; your CFO is able to effectively manage the budget and expenses relating to travel; and all employees who are involved in some way with travel or managing travelers, are able to more clearly focus on the important parts of their job.

Let’s get the conversation started about developing a travel and expense policy. MacNair Travel recently completed the “How to Create a Travel and Expense Policy” workbook that will help enhance control, maximize savings, increase productivity and support travelers. We can help you develop this important document for your organization. Interested in learning more? Click on this link for additional information and to download the workbook.

Travel Policy Workbook