The costs, and rewards, of a good travel expense policy
While it’s easy to have a clear-cut travel policy to manage the large expenses, such as airfares and accommodation, a travel program must also clearly spell out your organisation’s policy when it comes to other costs. All organisations naturally want to minimise overall trip costs, but without sacrificing long-term employee satisfaction. That’s why it’s important to have clear corporate policies around smaller expenses, so travellers know upfront which discretionary travel costs they are responsible for. One company may consider a casual gym class while on a business trip as being a personal expense, while another might see it as an investment in traveller well-being and happily pick up the tab.
It’s up to stakeholders to decide which expenses represent value to their organisation, however the topics below reflect some of the ‘grey areas’ which should be clarified for travellers.
Sometimes the most cost-effective mode of transport isn’t the most suitable for the situation. For example, in some cities an Uber may be more affordable than a taxi, however a business woman travelling alone may be more comfortable using a recognisable taxi company. Similarly, the quality, safety and reliability of public transport varies greatly from country to country. So some flexibility is needed, such as taxis being approved for use by single travellers or after dark. Travellers using their own private vehicle also need to know who will cover the cost of tolls, parking and mileage.
Meals and Beverages
Who bears the costs when a conference package includes all daily meals – but a traveller decides to make their own dinner arrangements? And should alcoholic beverages be paid for by the company?
Firstly, each company needs to decide on their own alcohol policy. Some companies cover the cost of alcoholic drink/s when consumed within a dinner period or when entertaining a client – but not outside this time or the hotel mini bar. Others exclude alcohol altogether and require these expenses to be itemised and paid for separately by the traveller.
Meals and beverages may also be at the discretion of the traveller who is simply given a daily expense allowance, with no receipts required. A daily allowance of say $98 for example, may be based on the following expense assumptions - Breakfast $21.00, Lunch $21.00, Dinner $36.00, Incidentals $20.00.
Entertainment and Well-being
Catering for a traveller’s personal entertainment and well-being, within reason, can be an appropriate way to reduce traveller burnout and to compensate for time spent away from home. A gym visit or massage may be the perfect antidote for a stressful trip and actually increase a traveller’s productivity. Other costs incurred by the traveller when away from home such as laundry/dry cleaning (depending on the length of the trip), newspapers and other small incidental travel related expenses are often covered by large companies. However, be sure to clearly set out what is not included – such as alcohol, toiletries, in-house movies, haircuts and beauty spa treatments.
Phone Calls, Data and Wi-Fi
An in-room internet connection is usually essential, and expected, for all business travellers. This can be included in the hotel room fee or paid by the traveller and claimed as an expense on completion of travel. Another feature to include in your travel policy is who is responsible for the cost of phone calls and Mobile Data Usage – both domestically and when travelling overseas.
Business Gifts and Tipping
When visiting overseas countries there are often different customs and protocols around gift giving and entertaining clients. In some countries it is clearly expected, while in others it’s not part of the business culture. It’s important to understand gift giving expectations, especially around the value of a gift, so as not to offend a business contact. Either provide the traveller with an appropriate gift before they depart or set an expense limit. Other costs such as restaurant tipping, is often only covered when it’s built into the bill and not determined by the traveller.
Once you have set your organisation’s expense guidelines, you also need clear reimbursement protocols. What’s the minimum expenditure amount that requires a receipt? Can employees upload their receipts on the go, via a mobile app or online platform? How should travellers pay for expenses – via personal credit card, company card or cash allowance?
As with all elements of your travel policy, expense processes and procedures should be clear and simple to understand - and easy for travellers to access on your company’s intranet.