travel and expense policy

Drafting a policy that is technically correct may seem straightforward. However, one that employees understand and adhere to is tricky. Without a clear travel and expense policy, employees may face inconsistencies and confusion regarding what expenses are reimbursable, leading to potential overspending and misuse of company funds. 

This lack of clarity can result in unfair treatment and disputes over expense claims. Additionally, it complicates the expense reporting process, making it difficult for both employees and the finance department to manage and track expenses effectively.

Here are 9 best practices you must consider while writing a comprehensive T&E policy and ensuring that it is effective.

1. Define the Objectives before Drafting the Policy

Before writing a travel and expense policy, you must establish what the policy will help you achieve. By defining objectives, you can align the policy with your company’s goals and values. 

A well-defined policy acts as a roadmap for supporting specific business objectives. For example, if cost reduction is a primary goal, the policy can include guidelines to control expenses and promote cost-conscious practices. Plus, these objectives serve as a basis for evaluation when it comes to measuring the effectiveness of the policy.

2. Use Simple Language

While writing the policy, you must use simple language that all employees can understand. If you are writing any technical terms, then include a definition for the same. You must also avoid acronyms that people might be unfamiliar with.

If you are including any complex processes, break them down into step-by-step instructions. This will help employees follow them better. After you have written the policy, you can conduct a readability test to assess the ease of comprehension.

In addition, you can gather a focus group to seek input and identify any section that may need further simplification.

3. Provide Guidelines on all T&E Processes

A comprehensive travel and expense policy ensures that employees do not face any confusion when it comes to decision making. For this, you must provide detailed guidelines on all aspects of T&E, such as:

  • Travel Approvals
  • Booking Procedures
  • Expense Reimbursement
  • Categories and Eligibility
  • Spending Limits
  • Payment Methods
  • Expense Reporting
  • Policy Compliance
  • Travel Safety and Security
  • Preferred Vendors
  • Non-Reimbursable Expenses
  • Expense Auditing

4. Emphasize on Visual Clarity

Reading a lengthy policy can be cumbersome. This means that most employees might skim through it and avoid reading important sections. To increase the likelihood that employees will read and follow it, you need to make it more engaging visually. Some suggestions to increase visual clarity include:

Logical Organization: Arrange the sections in a logical order that follows a coherent flow. Start with the overview and objectives, followed by specific topics.

Bullet Points: Use bullet points to break down complex information into easily digestible points.

Bold Headings: Bold headings help employees navigate through the document and locate specific topics easily.

Tables and Charts: These visual aids provide a clear overview and make it easier for employees to understand the information at a glance.

Consistent Format: Use the same font, font size, and spacing to ensure a cohesive appearance.

White Space: White space helps prevent information overload and allows the reader’s eyes to rest.

5. Consider Employees Needs and Preferences

While writing your travel and expense policy, consider the needs and preferences of your employees. This will increase the ease of adoption and the likelihood of them complying with the policy

Additionally, when a travel policy considers the needs of employees, it can positively impact their productivity. This is because it allows them to travel in a way that aligns with their comfort. As a result, they can better focus on their work during their business trip. 

Further, taking the needs of employees into account makes them feel valued and increases satisfaction rate.

6. Provide Real-World Examples where Needed

While explaining certain situations and processes, you can include realistic examples as well. Sometimes a travel and expense policy can be hard to understand, but when there are examples, it becomes easier to grasp the meaning.

Moreover, employees can refer to the examples as guides for their own actions. Providing examples also ensures that everyone understands the policy in the same way.

7. Include the Following Sections as Well

A travel and expense policy provides guidelines on major T&E processes. However, you shouldn’t overlook the importance of including the following sections in your policy. 

Bleisure Travel: Emphasize that the primary purpose of the trip should be business-related. Clarify that personal activities should not compromise the company’s interests.

Expense Disputes: Outline the steps to be followed for filing an appeal and the authority responsible for conducting the appeal review. Provide guidelines on the documents that employees must provide when disputing an expense. This may include receipts or invoices that substantiate their claim. 

T&E Fraud Prevention: Clearly state that any form of fraudulent activity, including but not limited to false claims or altering receipts, is prohibited. You must also communicate the result of engaging in fraudulent behavior, such as legal consequences or termination of employment.

Sustainable Travel: Encourage employees to choose the most sustainable mode of transportation for their business trips whenever possible. Additionally, provide information on carbon offsetting programs.

FAQs: The FAQs (Frequently Asked Questions) section must clarify common doubts of employees. Some of these questions are:

  • Whom should employees contact for assistance with travel and expense-related queries?
  • Are there any resources available to help employees navigate the policy?
  • What happens if an employee violates the T&E policy?

8. Address Special Situations

Occasionally, employees may come across unfamiliar situations during their business travel. It is important for your travel and expense policy to provide guidance in these unique cases so that employees know how to respond to them. Here are some instances where guidelines can be included:

  • Dependent Travel: Provide guidelines for employees who may need to travel with their family members or dependents. 
  • Travel for Special Events: If employees are attending any special event, outline any particular procedure they need to follow.
  • Unusual Expenses: Provide rules for reimbursement of add-on expenses such as those related to projects, research, or client-related activities.
  • Delays or Cancellations: Include information on reimbursement for stay or meal expenses incurred in such an event.

9. Revise Policy Regularly

You must update the travel and expense policy regularly so that it stays relevant and up-to-date with industry standards. To revise your policy, you can analyze past issues, such as budget overruns. In such cases, you can modify the policy to change spending limits or make the approval process more stringent.

Further, you can also consider employee feedback in revising your policy. Employee feedback helps identify specific issues or pain points related to the current policy. For example, employees may let you know about difficulties in submitting expense reports. You can use this information to update the policy to improve your business travel management processes. 

Implement a System to Streamline Policy Compliance

After you have written a comprehensive travel and expense policy, you would expect employees to follow it. To make compliance simpler for them, you can consider using travel and expense software. A T&E software solution allows employees to view the policy in real time, eliminating the need to refer to documents. 

itilite is an advanced T&E solution that can help you automate expense checks and whether they comply with your policy. The corporate travel management software flags any expense that does not adhere to the policy guidelines. This ensures that employees do not submit false or non-compliant expenses. Further, you can configure your policy at any time, and the changes are immediately reflected in the system.

To know more about how itilite can help you simplify policy enforcement, book a demo now.