How To Create The Best Travel Policy: A Guide For Small Businesses
If your company does travel for business, you need a travel policy.
A corporate travel policy is an essential aspect of business travel management. This applies to small businesses as well.
The policy keeps everyone honest and on the same page. You won’t have to worry about unnecessary travel expenses or an overextended budget.
In this post, we’ll go over the basics of travel policies and give you a comprehensive guide on how to create the best policy for your business.
Creating An Effective Corporate Travel Policy For Small Businesses
Your policy should align with your business culture and the nature of your organisation. Remember to be flexible. Industries and economies change, as do the needs of your employees.
Include the consequences for not following the procedures and always follow through. Being flexible doesn’t equate to being a pushover.
What to Include in Your Travel Policy
While no two corporate travel policies are the same, there are key similarities that they all share. We’ve compiled a list of essentials to include in your travel policy.
Your policy should include:
- Guidelines for booking flights, rail, hotels, and rental cars.
- Have categories for different kinds of travel. Greener travel options are fantastic!
- Rules for on-ground transport.
- Include options for app-based taxi services, Airbnb, and Wi-Fi/data expenses.
- On-site spending limits and rules. This can include meals, internet, phone calls, entertainment, etc.
- Travel safety and security for employees and work materials.
- Specified rules for giving and receiving gifts and/or favours during the business trip.
- Guidelines for the approval process that needs to be followed. Employees need to know who to send their travel requests to.
- A payment system for employee expenses during the trip.
- A travel booking system is easy to use and understand. You can use a travel booking agency, but a booking system is more cost-effective.
Best practises to consider:
- Have a meeting with your employees and explain the reason for the policy.
- The travel policy must be clear and easily understood. Use simple words and short sentences.
- Circulate it throughout the company. Make it easily accessible and ensure everyone knows where to find it.
- Regularly review the policy and make changes when needed.
- Integrate the policy into your travel booking software.
Steps for the Ideal Corporate Travel Policy
Corporate travel policies need constant reviewing, updating, and amendments. Try to involve employees when writing up the policy. Ask for suggestions and if you don’t use them, explain why not.
Here are a few basic steps that will help you create the perfect travel policy:
1. Define Your Objectives
- What do you hope to gain through business travel?
- What are the most important aspects of travel management for your company?
- How important is the safety and security of employees while they’re travelling?
- Do you plan on micromanaging, or can employees have some autonomy?
2. Ensure The Policy Reflects the Travellers’ Needs
Consider the best ways for your employees to travel.
- Are there specific destinations that your employees regularly visit for business? If there are, look into more comfortable accommodation options or better travelling options.
- Do any employees have dietary requirements or medical conditions? How will the company accommodate this?
- Are single parents able to take their child(ren) along? If not, will the company provide funds for extended childcare services?
- How easy is it for employees to book their travel? Will someone else make the bookings, or can they do it themselves?
3. Give Your Employees Options
Everyone enjoys having options, and it’s advisable to give your employees a few.
- You can give them a list of hotels and airlines to choose from.
- Allow them to choose any hotel with a specific star rating and room type.
- They can book with any airline as long as the ticket is a specific class.
4. Set Clear Guidelines for All Travelling Aspects
Your policy should include all aspects of travelling.
Include everything from flights, hotels, meals, and even accepting gifts. Have clear guidelines for everything. Using travel management software will make it easier. Our software allows travellers to book all travel-related aspects in one place.
You can incorporate your policy into the software as well. Employees can then access the policy when they book their trip.
5. Forecast Your Budget
You’ll need intelligent forecasts for your annual travel expense budget.
You do this by looking at previous travelling data. Focus on average nightly hotel costs, flights per mile, meal costs, and ground transport.
This allows you to predict expenses for the coming year.
If your company is new to business travel and has no previous travelling data, you can research the averages for the intended destinations.
Compile a database with these expenses and use it to draft your budget.
6. Set Expense Limits
Setting travel expense limits is essential. Here are a few things to consider:
Travel costs are for business travel only, i.e. meetings, events, and/or training. Non-business travel will be at the employees’ expense.
On-site transport should be as cost-effective as possible. Should they use public transportation? Will the company pay for app-based taxi services?
Remember what we said about options? Allow business travellers to pick their accommodation without stretching your budget.
- Allow them to choose a standard room at hotels with a certain star rating.
- Give them a budget for room price per night.
- Provide average room rates based on location. Let them know to stay within this range or pay the excess out-of-pocket.
It’s important to state whether the company will cover additional charges. These could be minibar charges, Wi-Fi costs at the hotel, etc.
It would be ideal to set daily meal expense limits. This gives employees the freedom to choose how much to spend per meal.
They can choose where and when to have their meals as well. If they have meals with clients, define if there will be a separate expense limit for this.
Remember to include guidelines on alcoholic beverages. State whether it will be at the employees’ expense unless it’s for a client.
If employees need to entertain clients, setting an expense limit or range is important. This can include meals, beverages, or things like theatre plays.
It should be clear that managerial approval is required for reimbursements.
It would be good to clarify whether this limit only applies to clients or if it includes the employee as well.
Most expense policies cover tips as well. Many companies only cover it if it’s been included in the bill as a service fee, and they cap it at 20%.
Additional tips are usually out-of-pocket for business travellers.
7. Have Security and Safety Procedures in Place
Employee safety and security should be an important concern. Their safety is your responsibility while they travel for business.
Have emergency procedures in place. They should know what to do and who to call if something happens.
This is especially important if they’ll be in high-risk countries. Provide travel security and safety training. Give them the knowledge to protect themselves if needed.
The travel policy is an important aspect of business travel management. It should have guidelines on every aspect of travel.
Employees should know how to book their trip, the expense limits, and how much autonomy they’ll have.
Incorporating your travel policy into travel management software is the best way to do this. The policy will be easily accessible and readily available.
Remember to plan your travel expense budget for the year ahead. This will prevent unnecessary costs.
If you would like to know more about how EnterAnGo can streamline business travel for your team, contact us today for a demo on our platform.