Though we’ll deal with the various disadvantages of businesses not having a sound travel policy in another separate post, we would like to discuss here why companies show so much reservation or reluctance in their efforts to enforce travel policies. Seldom do they realise that they are losing money and control upfront when they don’t create one. And when they do realise this, it is either too late or too costly an effort to contain things.
First, and that’s a pretty straightforward one: lack of assistance in the creation of a travel expense policy. Sounds basics? Yes, it is. It may sound like a herculean effort; nevertheless, there are a number of free expense policy templates available online that you can make use of to create a simple, workable policy and one that remove the guesswork of what a travel policy is and its intended function: you needn’t have to design one from scratch.
Second, it may prove tricky, at times, to enforce travel policies. While this holds true for most organizations that rest on manual processes including paperwork, travel expense receipts, bills, etc, for organizations that are already using expense management solutions, it is lot easier. Travel policy rules are incorporated into the system, so that users cannot enter or submit those that fall outside the travel policy expenses.
Companies need to combine these with an online booking tool and partner with a travel management company (TMC) to book travel, further improving travel policy compliance. This would ensure business travellers adhere to those hotels, resort chains, airlines and car rental companies that have been approved by their employers. Also, with a set travel policy, companies can monitor if authorized expenses stay within the proper parameters.
A third issue that most companies need to deal with is striking the right chord between making the employee happy or losing unhappy employees against the savings made by establishing and enforcing policy compliance on them. To put things in perspective, companies are aware of the escalating costs to hire a new employee against that of retaining an existing team member. Therefore, if asking your high performers to go frugal on expenses becomes a factor in employees exiting your company and joining a competitor, all the savings made would prove futile. It is vital for any company to create a working culture that incorporates business travel policy in both spirit and letter.
None of the reasons stated above should deter a business owner/CFO/Travel manager in establishing a travel policy and using the same to cut extravagant or unauthorized travel spends through negotiated volume discounts. More often than not, it is the onus of the travel manager to create a fair, straightforward and workable travel expense policy that could incentivize in terms of a healthy balance sheet and employee contentment.