Corporate Travel Management Blogs
The checklist to improving corporate policy compliance
A corporate travel policy is advantageous to a business only when travelers comply with it during all stages of the business trip. As simple as it sounds, most SMEs find this a complicated feat.
Instead, for a business to achieve an adequate level of compliance, it must focus on crucial aspects such as the extent of the policy coverage, its visibility, and friction with travelers.
This article explores some of the most common difficulties businesses face in enforcing their travel policy and practical ways to improve compliance.
Why you need a corporate travel policy
The core function of a corporate travel policy is to enable managers and traveling employees to increase a business trip’s productivity, practicality, and feasibility. It is a well-documented guideline for business travel management that clearly defines the company’s policies on all aspects that make employee travel possible.
To achieve this, it should elaborately dictate to travelers what the business considers an acceptable expense the company will bear and what it will not.
While corporate travel policies are customizable and differ from company to company, most typically cover airfare, accommodations, per diems, food & beverages, events, and transportation.
It helps companies avoid challenges, such as inflated booking prices, inaccurate reconciliations, and reimbursement issues. The sooner businesses realize the benefits of achieving complete compliance, the closer they get to attaining streamlined and lucrative business trips that improve the travel experience.
Why travel policy adherence may be an issue
Let us explore the most common problems organizations face when trying to enforce a travel policy:
While changing your corporate travel policy to reflect current economic and travel conditions is crucial, it is equally important to communicate these changes to the travelers. Doing so can increase policy compliance by bringing travelers up to speed on the updated policy coverage.
Failure to communicate your policy effectively can result in widespread compliance and financial issues, such as inflated travel costs, which could lead to delays in reconciliation and reimbursement.
Select easily accessible communication channels and ensure that your travel policy and any changes made to it are relayed to your employees promptly and accurately.
Lack of understanding
Even if you successfully send your travel policy to all your employees over multiple communication mediums, it has to be easily discernible to ensure compliance. A non-comprehensible and complex business travel policy may make it difficult for the traveler to understand.
A better approach could be simplifying it to contain the essential information travelers must be aware of before, during, and after their trips.
Not all instances of employees breaching the travel policy are deliberate in nature. In most cases, employees inadvertently breach company policy because they are unaware that it does not cover certain expenses.
In such instances, it is only during the post-facto reconciliation phase does the traveler and the finance department learn about the non-compliance. When this occurs, the transaction becomes a non-reimbursable personal expense to the traveler, which is entirely avoidable through better policy awareness.
A good practice is to make your policy, including guidelines and procedures, readily available to the entire organization. Educating traveling employees on the approvals process and their work requirements throughout the trip is paramount to avoid accidental breaches.
Today, an emerging problem facing most SMEs comprising a significant number of millennial employees is ‘bleisure trips’ or ‘business leisure trips.’ Traveling employees of this demographic combine their personal holidays with business trips to perform low-cost vacations because the employer already bears the airfare costs.
In such trips, the employees begin their vacation a few days prior or a few days after the business trip.
Although, in theory, this practice should be a win-win situation for both the employee and the employer, a recent study by Forbes claimed that 43% of surveyed millennials on bleisure trips are likely to mistakenly charge some of their personal expenses on the company, ultimately owing the business money.
In such instances, a trust-based traditional travel management system cannot effectively track these breaches in real-time, resulting in numerous accidental violations getting signed off as legitimate expenditures compliant with the business trip policy.
What’s worse for the business is that these non-compliant transactions often get reimbursed to the employee.
Employees are knowingly breaching the policy
Employee misconduct is a significant problem affecting businesses engaging in traditional travel management systems that causes varying degrees of operational and financial harm. Deliberate policy breaches can occur during any stage, from early booking to trip completion.
While some minor intentional policy breaches may involve employees knowingly exceeding prescribed per diems, other more severe cases may include misappropriating travel funds towards leisure activities that have no bearing on achieving the trip goals.
Another pressing issue of deliberate non-compliance is when a traveler books a needlessly expensive flight ticket or overspends on luxurious accommodation when cheaper options are available, causing the business to spend more from its pocket than required.
These are some of the numerous ways businesses suffer from knowing policy breaches that pose a high risk of travel budget inflation that drives down the feasibility of the business trip.
Deliberate breaches also increase the finance department’s workload due to the extensive time taken to review all transactions to check if they are justified and compliant with the company’s travel policy.
It is best to avoid trust-based travel management systems to prevent such instances from occurring.
How to improve travel policy compliance
Your strategic plan to achieve complete compliance must address all your organization’s unique issues. Here are some simple strategies and travel policy best practices that you can adapt and tweak to improve your compliance:
1. Educate travelers
The mode of delivery of your corporate travel policy to your organizational stakeholders is a crucial factor that determines its compliance. Conveying the policy and all its essential information personalized uniquely to the travel destination and employee is an excellent way to educate the traveler.
A good practice is to include information on how to book tickets & accommodations and acquire approvals to strengthen compliance. This method also gives the employees a clear understanding of their travel goals while providing them with a certain degree of booking and expenditure control to plan and manage their trip expenditures appropriately.
Educating employees on the travel policy is also a practical approach to enhancing trip productivity.
2. Communicate policy guidelines clearly
The guidelines ensure that all travel bookings and expenses stay within their assigned limit. These factors greatly influence the economic outcome of the trip and should be curbed at every possible juncture.
Simply providing the documentation on company policy guidelines will not suffice as employees may find it tedious and may not take the time and effort to read it. Communicating these guidelines to the employees early on during the pre-planning stages, right up to trip completion, ensures that they are always maintained.
The policies must specify booking preferences, allowed expenses, and a point of contact in case the employee requires further clarification.
Making the guidelines accessible to all stakeholders should be implemented early and maintained as an ongoing practice. This practice should also reflect all amendments and additions made to the corporate travel policy to ensure optimal company-wide compliance.
3. Restrict expense reimbursement
In the current state of business travel, a traveler’s business trip expenditure is spread across an average of three hundred transactions. With such a high volume, it is an error-prone and challenging task for travel managers and finance teams to track and differentiate between compliant and non-compliant transactions.
Especially in bleisure trips, the line between the business and the leisure trip might get blurred, resulting in employees spending more than they should on their corporate credit cards than authorized.
Avoiding this problem involves providing travelers with a clear account of all non-permissible trip expenses that will not qualify for reimbursement per the corporate policy.
This information should detail what is covered and what is not to ensure that employees know exactly where the business draws the line as per the trip expenses—restricting these non-compliant expenses curbs unnecessary costs while significantly improving trip feasibility and simplifying the reimbursements process.
4. Factor in employee satisfaction
A Mckinsey study suggests that providing travelers an adequate level of control, comfort, and convenience should be one of the top priorities for all future travel. This approach could benefit businesses greatly because the productivity achieved on a business trip depends on the traveling employee’s capability, willingness, and morale.
For this reason, it is essential to maintain employee satisfaction and confidence to achieve and upkeep future trip productivity. A simple method to accomplish this is to conduct periodic surveys to gauge employee satisfaction levels.
According to the survey results, you can make policy changes that mutually benefit the business and traveling employees. Employee travel perks go a long way in boosting morale and job satisfaction.
Allowing bleisure trips while ensuring they have no additional cost to the company is an excellent way to keep employees motivated and achieve their business travel goals.
5. Switch to a travel ERP
Your corporate travel policy should not be a tedious and complicated document that forcefully attempts to achieve compliance.
Instead, it should have a granular focus on the critical aspects of corporate travel that, when addressed, makes the core competency a significantly lesser cost center to the business than needed.
A lucrative solution to all your compliance issues could be to employ modern travel enterprise resource software as an alternative to your existing systems. It is advisable to apply the same approach to your executive travel policy to address the business goals and traveling needs of higher-level organizational executives.
Several adequate outsourced ERP software providers in the market today can help solve your compliance issues.
Improve your corporate travel policy compliance with Tripeur
Tripeur is a state-of-the-art travel management platform that eliminates the burden and responsibility of the travel desk, managers, and c-suites by keeping all traveling and non-traveling stakeholders updated with the travel policy.
Our system eliminates compliance issues by logging all business travel expenditures in real time. These logs actively give employees T&E visibility to inform them precisely on what travel expenses they are entitled to and their limitations.
Tripeur’s platform aims to help businesses overcome their compliance issues by providing managers with the functionality of providing WhatsApp and email approvals accompanied by automated expense reports. Through our system, management can instantly identify and mitigate any non-compliance in real time and enforce preventive measures to prevent future occurrences.
Additionally, the expense reports generated by Tripeur’s platform enable the finance department to increase the accuracy and promptness of reconciliations and reimbursements significantly.
Our innovative and user-friendly product could be the one-stop shop you need to stay compliant moving forward to the re-emergence of international corporate travel. Every tool you need to maintain compliance is readily available within Tripeur’s robust platform.
Contact us at Tripeur to find out how we can help you improve corporate travel policy compliance.