Travel policy

Definition

Travel policies are catchy rules that come into effect when planning, preparing, approving and settling business trips. They are an essential part of a company in order to save business trips, material and personnel costs.

Good travel policies do not have to be 100 pages long

A good travel policy helps companies to get a better overview of all travel, align work processes and limit budgets. But also the traveling employees benefit enormously from the higher transparency that comes into effect in the respective travel processes. They receive an instruction manual on how trips are booked and accounted for.

However, the travel policy does not always turn out to be an informative guide, as it is often too detailed and far more than 70 pages long. While the document does the job of covering all options and contingencies, it fails to convey the essentials succinctly. The likelihood that employees will read a 70-page document before traveling is so low that companies need to write a shorter version of the travel policy. The advantages of a short travel policy are that the document focuses only on the most important facts, which makes it much easier for employees to read.

In addition, travelers can remember the aforementioned information more quickly and also find their way around the document better. This helps to avoid complications before and after the trip, which minimizes administrative work and reduces costs.

A travel policy should address these points

However, before a company starts to draw up a set of rules, it should first be clarified which points should be included at all. Basically, it is advisable to include the following things in the travel policy in any case:

An introduction

Staff should find a brief introduction and explanation on the first page of why the policy is important to them and what they can find in it.

The means of transport and budget

Which means of transport may be used, which overnight stays are granted and at what price.

The approval and release

A travel policy should list who in the company may approve and release business travel. Executive approval may need to be obtained before the trip can be released.

How expenses are accounted for

This lists how the accounting works, which receipts are required and whether a certain tool is used for travel expense accounting. If, for example, there are certain requirements for the company credit card, these can also be listed here.

Certain tax requirements

If employees have to observe certain tax aspects on their business trip, these should also appear in the guidelines.

Reduce travel costs in the long term

The travel policy ensures that the travel costs incurred do not completely exceed the budget. The company should always keep the cost-benefit ratio in mind; it does not always have to be a first-class air ticket if the employee can also travel by train. General travel expenses are largely made up of the following components:

How did the journey take place?

The journey takes place by: Train, bus, plane or rental car

Which accommadation allowances are granted?

This refers to costs incurred, for example, in a hotel or Airbnb.

Which meals are covered by the employer?

These are costs that are incurred when meals are provided for the employee.

Important answers to frequently asked questions

1. Do the travel policies also have to address different employee groups?
   Yes, they have to, because the budget is set higher or lower depending on the position of the employees.
2. Do the travel policies have to include guidelines for emergencies during the trip? Yes, it should state how to deal with emergencies or accidents.
3. We have already formulated a policy, but it is far too long, what can we do? Keep the long version, but make a short version, for which you should go through the current policy and note only the most important points.

Conclusion:

A well-written travel policy is necessary to standardize booking processes, clearly limit expenses and support staff:inner in their travel. A travel policy should be clear and understandable, even for employees who are not too familiar with accounting policies. Therefore, it can help to prepare two versions of the travel policy, a detailed one that goes into any details and a shorter version that serves as a kind of checklist during a trip. For this purpose, the various stakeholders of a company should be involved, from the CEO to the office manager. This is the only way to optimize work processes and save costs in the long run.