While business travel dropped by nearly two-thirds during the COVID-19 pandemic, it still keeps money moving through the economy. It generates more than $300 billion in annual revenue before including the hospitality and restaurant industries’ involvement.
For businesses that rely on people going from place to place, travel expenses can add up. Flights, rides, hotel stays, business lunches, and other incidentals can take a bite out of the budget if you let them.
Every business needs a solid travel and expense policy. Here, we’ll go over some of the basics of how to construct such a policy and avoid common pitfalls.
Tailor Your Travel and Expense Policy
It sounds simple enough, doesn’t it? Your travel expense policy should match the way your business does business.
If your company tends to approach things in an easygoing way, your travel policy can be pretty simple. Entertainment giant Netflix only asks that employees act in Netflix’s best interests. That’s the whole policy.
A company with a more rigid culture should mirror this in its expense policy. If you run the type of ship that expects every T to be crossed, a policy that expects saved receipts and detailed reports works.
Whether you achieve it through brevity or precision, though, your policy needs to be clear. No one should feel ambushed by an expense check.
If you only intend to cover one trip per month per employee, say that. If you only want certain job titles to come with business-class or first-class seats, say it. Make sure time and expense reporting remain consistent, regardless of how broad your policy is.
This becomes more important when noting exceptions. Whether your exceptions to general rules exist to allow more business travel expenses or curtail them, set them out clearly. Many travel policies start with a list of expenses that won’t fly.
Many businesses encourage employees to travel sustainably. This can include incentives to use public transit, reduction of baggage per trip, or having fewer employees on a given trip.
The sustainability efforts you can make depend a lot on the details of your business. Sometimes public transit won’t work for your purposes, or your work requires a lot of baggage. It’s worth consideration for a modern company travel policy, though.
Set Out Principles
While the narrow rules you set are important, employees should also understand the reasoning behind those rules. Some policies set out explicit values, such as integrity or good value. Others note that decisions should price in an employee’s emotional well-being while away from family and friends.
Make Sure You’re Willing to Cover It
Any travel and expense policy should make clear what you’re willing to cover and what you aren’t. As long as you stick to the above principles, you should be able to create a policy that your employees will treat with respect.
Looking for more advice on how to approach business-related costs? Check out our business section. We’ve got the news and ideas you need.