One of the first things that we ask for when we implement a new customer’s travel program is their Travel and Expense (T&E) policy. It is a good indication of what pieces of the travel program are working well, what pieces are not and what really needs to be addressed. Ambiguity is by far the biggest issue that we see throughout most T & E policies. When you do not clearly define your guidelines throughout your policy, money is left on the table and operational efficiencies are not fully realized. Below are six concepts that we find are often ambiguous or non-existent within T & E policies that we see.
Many policies specify that when booking their travel, a traveler must select the “lowest available fare”. However, simply telling the traveler to book the lowest available fare is not enough, you must define what that means. Does it mean that all travelers must select the lowest available coach fare? Are there thresholds? Does it take into account layovers and time spent at the airport, which is time spent away from the job? Clearly defining what the “lowest available fare” means for each traveler (road warriors, C level executives, your VIPS etc.) will ensure that the policy dictates this in a way that is enforceable.
Do your travelers know who to go to and for what, in each particular instance of the T & E process? Who do they call for a service issue? What about expense reports or an insurance issue? How do they make an online reservation? Where do they go to get login information and passwords to be able to complete certain pieces of the T & E process? How about approvals for travel inside or outside the policy? This should all be defined within your policy, or at the very least outlined where to go to get this information. This section should include contact information and have who is charge of certain items within your organization, along with the point of contact with each of your suppliers.
A travel policy is most successful when every step of the T & E process is well defined. Everything from how to look up the fare to booking it, all the way to changing the itinerary and expensing it. You want to outline when travelers have to use the Travel Management Company (TMC) and when they can go elsewhere. Who approves the trip once the traveler wants to book and what is the approval process? Payment needs to be addressed; including whether a traveler should use a corporate card to book their travel, why they should put it on the corporate card, and what opportunities are available by streamlining the payment process. When outlining your process within your policy, pay particular attention to any operational efficiency pain points that you notice and where defining clear process can help.
Considering all of the events in the news lately, the safety of travelers is certainly top of mind for all of us. When addressing safety, you want to look at everything from medical issues, to weather, to terrorism. These issues are not exclusive to those who travel to remote parts of the world – you could have to worry about the latter in San Bernadino or even Ebola in Texas. You should outline the benefits of using your TMC and your other safety/risk mitigation/insurance partners and why it is important from a safety standpoint. Going outside the system may mean that you are unable to track your travelers, which could jeopardize their safety. We also recommend that you have your legal and HR teams review this portion of the policy to ensure you have all of your bases covered.
Many of you probably have negotiated preferred supplier agreements that give you access to discounts and other incentives for using your preferreds. Obviously, you would want your travelers to book with your preferred suppliers. Within the policy, you should define specifically what people must do in relation to your preferred suppliers. For example, are they allowed to book outside your preferred airline if the preferred does not offer a nonstop flight? In the policy, list all preferred supplier agreements and even go as far to explain that they are programmed into the online booking tool. Address why and how the organization handles those agreements so that is clear as well.
Outlining your data collection procedures is important for travelers to understand your overall plan and requirements of what needs to be included with the booking and reporting of a trip. This would include capturing data such as customer codes and project codes that need to be attached to a particular trip. Giving these guidelines for data collections ensures proper budget reconciliation. It is also important to explain that this could be a contract or customer requirement.
Keep in mind when looking at and drafting your policy- that it is just that: your T & E policy, not MacNair’s policy that you are simply enforcing. This is where you direct people to your fulfillment partners – TMC, your suppliers, your expense partners, maybe even risk mitigation or insurance partners. You should stand behind everything outlined in the policy. So, if someone goes outside this system they are going around your organization – not around your TMC.
Have you looked at your travel policy lately? Are all of these points addressed? You should check your policy regularly and feel free to ask us to review it with you. Ask about recent changes within the industry and see how that could affect certain parts of the policy and what may need an update. A great tool to use in jumpstarting a review of your current policy is our Travel & Expense Policy Workbook, we recommend you download it and use it as a guideline. Let us know if you would like help assessing the state of your policy.