What do small businesses need to include in their expense policy?
There’s a lot to consider when arranging business travel.
For starters, it’s important to define budgets. This should be based upon your business’ current financial situation. It’s also important to bear in mind that budgets can fluctuate with the seasons, so you should aim to provide a general rule. And whilst a large corporation might need to include maximums for every major city and route in the world, a sufficient travel expense policy for small businesses might include just a few popular cities and routes that the company travels.
It’s also worth
reviewing the booking tools that employees can use
, how far in advance they should book to maximize savings, and how they should pay. With TravelPerk, everything you need is in one place. You can book from our industry-leading inventory and with our Premium feature,
define a travel policy and approval workflow
in under 2 minutes
Make sure you set out what the company will cover. For example, if an employee is having dinner on a work trip, it’s a given that this should be covered as a travel expense. Now let’s say this employee wants to treat a client or contact to dinner, because they think it would positively impact the business relationship. Covering these costs would definitely be in the best interest of your business.
A good travel expense policy should also cover expense filing and a plan for reimbursements. Questions you need to answer are:
- How should staff file their expenses, and what’s your system for managing expenses?
- What documentation is required, e.g. bank statement or receipt?
- When can employees expect to be reimbursed? Will they receive the money in the next pay run, or separately?
- Is there a time limit to claim on expenses?
A Lot of your policy will depend on your business goal and current travel set up. For example, using a
small business travel agency
will have higher costs for changing flights than say a booking tool, so you may want to be more restrictive - or perhaps you need sales staff to be able to react quickly and visit clients, these are all things to consider in your expense policy.