In today’s era of remote workforces and increasing travel for business, having robust travel expense policies is crucial. This blog talks about non-negotiable aspects of modern travel expense policies you should implement.
Such policies ensure transparency, compliance, cost control, and employee satisfaction. They cover reimbursing travel expenses. A good expense policy is modern. It considers the latest travel trends, technologies, and rules. It is a guide for employees.
What Should Modern Travel Expense Policies Include?
1. Clear Guidelines on Allowable Expenses
A foundational element, modern travel expense policies need to provide clear, unambiguous rules on what employees can and cannot expense. The business travel expense policy includes hotel rates caps, airline class of service, meal allowances, ground transportation modes and more.
2. Detailed Expense Reporting Process
The instructions need to be clear. They should cover filing expenses. They should have dollar limits, restrictions, receipt requirements, and reimbursement timelines. Many modern travel expense policies now stipulate a “no receipt, no reimbursement” clause. Requirements around electronic receipts from email or mobile apps can be included.
3. Preferred Vendor Programs
To maximize cost savings, modern travel expense policies should mandate using negotiated rates with preferred travel vendors. Many firms establish discounted corporate rates with airlines, hotel chains, car rental agencies and more to drive volume.
4. Approval Workflow Hierarchy
Clearly outlining approval hierarchies and processes is important for modern travel expense policies. Rules can be based on expense amount, travel purpose, employee level/role and other factors. For example, expenses under $500 may need manager approval. Those over $2,000 are sent to department heads.C-suite approvals can be mandated beyond set limits.
5. Per Diem Allowances
To simplify meal and incidental expenses, business travel expense policy provide reasonable per diem allowances based on location. Rates can vary for domestic versus international destinations to account for cost differences. For instance, a $60 per diem for meals in Chicago versus $100 for London. Typically, the first and last day of travel have lower pro-rated amounts.
6. Corporate Card Usage Guidelines
Most corporations provide employees with company-issued credit cards to pay for travel expenses. Business travel expense policy should mandate using these cards to allow better spend visibility and consolidate billing. Employees may be able to use personal cards in exceptional cases, provided they follow stricter reporting requirements.
7. Sharing Economy Rules
The rise of sharing economy services like Uber, Lyft, Airbnb present challenges that policies must address. A common approach is to allow their usage for certain situations like ride-hailing for airport transfers or accommodation in cities lacking preferred corporate hotels. The modern travel expense policies inlcude Cost limits, documentation needed and other guardrails can be stipulated.
8. International Travel Guidance
When employees travel abroad, many more factors come into play. They should be included in the policy. This includes guidance on exchange rates, processes for currency conversions, per diems for international destinations and more. Visa, immigration and travel advisories based on the country are important. Will employees be allowed to expense costs for visas, mandatory vaccinations etc.? Â
9. Technology Integration
The newest corporate travel expense policies are in software and apps. They are not just paper. Employees can easily access them. Integration with corporate booking tools, online travel agencies and expense management systems automates processes and prevents violations.
10. Regular Policy Review Mechanisms
Business travel is always changing. So, its expense policy should not be static. Review and update it instead. Major events like mergers/acquisitions, new technology upgrades, regulatory changes and more necessitate policy amendments.
ITILITE: The Ultimate Travel Expense Management Platform
With the expense management platform of ITILITE, companies can effortlessly implement all these best practices for modern travel expense policies. ITILITE provides configurable policy rulebooks, automated approvals, integrated corporate booking tools, per diem management, travel card reconciliation, and real-time analytics – all within a user-friendly mobile experience.
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