How to write a travel policy
Many make the mistake of presuming a travel policy only ensures travelling employees keep travel costs low when using the company credit card. It’s so much more than that; every business needs to implement one whether their team is travelling within Canada or further afield.
A business travel policy can be a huge time-saver for your finance team, travel managers, and travelling employees. It can set expense reimbursement regulations and expectations, build clarity around visas, dictate cancellation processes, insurance coverage, and so much more.
Find out how to build a company travel policy that benefits every travel stakeholder in your business.
See how to reach 100% travel policy compliance
How to build a travel policy for employees (so they really follow it)
While your company will absolutely benefit from having a policy, it’s important to put your employees first. When you consider the needs of your employees, you increase the chances that your policy will be useful to them.
Here are two important ways to put this into action.
- Include information that employees need (like reimbursement, expenditures, and safety) – If employees need to refer to your policy, they’re more likely to become familiar with it. Include your travel and expense policy so they know what personal expenses they can get reimbursed for, and include the reimbursement procedure. Coordinate that with your finance department to guarantee alignment with all stakeholders. Also, include travel insurance and emergency procedures, especially in post-pandemic times.
- Clearly state the approved travel booking tool with built-in policies. You shouldn’t expect employees to remember the allowed rate per night in 100 different cities for all their travel arrangements. Use your travel policy to remind employees what the approved travel booking tool is. This platform should include built-in policies with budgets by rate and route for business purposes, as well as approval processes, so if something is out of policy, a request gets sent to the right manager. Don't forget to include information regarding air travel, personal travel, and things like your company's business class policy.
If you’re looking for details on the best travel policy format, check out our policy template.
How to write an effective travel policy in 7 steps
Let’s dive into your travel policy creation. We’ve created a 7-step guide that includes everything from effectively managing business expenses to dealing with a travel agent or travelling on business days. Let’s get to making every business trip a smooth one from start to finish.
1. Review the policy on the table
First up, you’ll want to review the policy you’re currently dealing with. Perhaps you’re not dealing with a travel policy at all—which could be a bonus as you’re starting with a clean slate and don’t need to worry about changing employee processes.
If you do have a policy now, ask yourself the following questions:
- Are your employees using it?
- When was the last time it was updated, and by whom?
- Who needs to be involved in updating it?
- What areas are sticking with your employees, and what’s being forgotten?
- Is it tied to a travel agent, and are you still working with them?
Once you’ve answered these questions, you’ll be better positioned to start your rewrite. You’ll know what’s working, who you need to seek input from, and who or what parts of your policy you need to cut for the next rendition.
2. Define your travel policy’s goals and KPIs
How are you going to know your policy is effective if you don’t know what effective looks like? Find 2-3 goals that will determine the success of your policy and map out KPIs that showcase you’re on your way to hitting those goals.
If you’re struggling to think of what your goals can be, it’s a good idea to revisit the drawing board in point one and ask what wasn’t working with your current solution? In this case, what would working look like?
Here are some potential goals and KPIs to get your started:
- Eradicate the use of a personal credit card for travelling employees
- Shorten process time for travel reimbursement
- Have employees clearly understand their reimbursable expenses
- Minimize complaints and tickets for the finance team
- Increase employee satisfaction when booking travel
- Improve travel policy compliance
- Reduce overall business travel costs
Goals will look different for every business, align on what works for your business and get those goals on paper. These will drastically help you assess the success of your initiative.
3. Involve travel stakeholders
The size and organization of your company will determine who needs to approve your new travel policy template. People are busy. Some stakeholders will be involved throughout the process—like human resources. For other stakeholders, like your company vice president or other C-suite staff, you should give them a list of things to approve or check so that you aren’t asking for too much of their time.
Here’s who should either help write the company travel policy or approve the final version:
- Travel manager: Brings insight into traveller behaviour, goals for the policy, and all the details on travel vendors, negotiated rates for international and domestic travel, insights on bleisure and other related travel
- Office manager: Brings insight into issues with the travel booking process and travel support, and helps set goals for improving the policy and procedures
- CEO: Brings business-related insight into goals for compliance and cost savings. Will also have ideas for streamlining expense reporting procedures, payable entertainment expenses, can decide on whether the company should allow a travel advance, and more.
- COO: Helps set goals for streamlining processes and saving time, as well as improving duty of care compliance, and innovating ways to deal with clunky processes: for example, using software to digitally save original receipts
- Finance managers: Are great to assign per diem rates, identify out of policy expenses, understand exchange rates, fix old processes, and handle other business-related expenses
- Frequent travellers: Know what works and what doesn’t with the current travel policy, and can also act as the voice for fellow travellers
- HR: Understands employee demands and expectations, extended travel to see a family member or other personal reasons, can set allowances surrounding alcoholic beverages, and also has a different set of goals for travel (hiring, as opposed to sales or marketing)
Work together to create a policy that meets everyone’s needs. Choose from the team members listed above. To minimize disruption to everyone’s regular responsibilities, hold a kick-off meeting to establish goals, then work independently to complete the template customizations.
You can contact individual stakeholders for help on certain sections when needed. Afterward, hold a final meeting with all stakeholders to review the policy before rolling it out.
4. Build your travel policy management culture
Now’s the time to choose the culture that you know will be most effective with your workforce and current company culture.
Ideally, you’ll want to grant your travellers as much autonomy as possible when it comes to booking their own travel. It will streamline the process, save everyone time, and will empower your employees to better enjoy business travel.
Booking autonomy is that much easier if you’re using a business travel booking tool. It will help ensure travellers have the freedom to book on their own terms while you’ll be able to integrate your travel policy into the booking settings—keeping travellers booking on the terms you’ve set.
5. Decide what to include in your policy
You need to decide what to include in your policy. Below, we’ve got an overview of the basics. For more details, please see the next section of this guide.
- An introduction with an overview of why the policy is important for employees to review and what they will find inside
- Your approved travel booking procedure and your approved business travel booking tool, including timeframes for booking and approvals.
- Allowable expense categories, with details on what’s reimbursable in each category. Make sure you cover things like meal expenses and whether it’s included in your policy or not.
- Non-reimbursable purchases (so travellers know what they must pay for themselves if they want something that isn’t covered). Things like paying for dry cleaning (and other personal use services) usually aren't covered by your company travel policy!
- Your policy regarding airfare and ground transportation (car rentals, rail travel etc.)
- How to submit expense reports, expense claims, and reimbursement requests
- How to contact travel support, travel insurance, and duty of care vendors, as well as your emergency procedures
While a travel expense policy for small businesses might include just a few popular cities and routes that the company travels, a corporation might need to include maximums for every major city and route in the world.
6. Draft your policy and get approval from stakeholders
The next step is to write up your policy and ensure that it includes all of the above. Get approval from all of your stakeholders, not just the higher-ups. Remember to get feedback from one or more frequent travellers to make sure the document is as clear and concise as possible.
7. Set up an automated travel policy that works during the booking process
After you’ve updated your travel policy document, you should create an automated version to guide travel bookings around the clock. An automated travel policy bars or allows trips to be completed at the time of booking, based on your parameters, such as global cost maximum per flight, or cost maximum per certain routes. Learn more about automating travel approval.
In our next article, we’re giving you a fill-in-the-blanks policy to make this employee travel process as fast as possible.