A Corporate Travel Policy: How it Will Save Your Company Time and Money
Most companies, large and small, have employees going out to conduct business. They may be driving to a local area, going by train to a regional location or flying around the world. Corporate travel may be as little as once a month, or as much as several personnel travelling for business each week. As a business owner, CEO, or CFO, it is to your advantage to have a corporate travel policy and a travel management service. In this article, we will discuss what a corporate travel policy is and the various benefits of having a travel policy.
What is a Corporate Travel Policy?
A corporate travel policy is a document that details the parameters and guidelines pertaining to all corporate travellers including board members, executive management, employees, corporate guests, candidates, etc. Essentially, anyone who will travel on behalf of your organization. An in-depth policy will cover booking guidelines, preferred vendors, expense management and reporting, communication and much more – virtually anything that your company would like to set as a guideline concerning travel on behalf of the company. It is important that a travel policy remain up-to-date and all of your company travellers are provided with a copy.
Travel Policy Benefits
Companies with extensive travel requirements develop guidelines and processes for booking travel, many of which are designed with cost containment in mind. Your travel policy is your vehicle to clearly communicate those processes to your travellers. It outlines how your business travellers should book their travel and which vendors to use – and in what circumstances. Plus, when business travellers follow the processes outlined in their company’s travel policy, it can significantly streamline your data capturing which is key when you are in negotiations with vendors and suppliers. Having accurate data helps you understand your annual spend on corporate travel, develop comprehensive insights into your travel needs, build your budget and identify areas for further cost savings.
For example, without a corporate travel policy, your business travellers may be booking their own travel using a number of different sources instead of utilizing the company’s mandated online booking tool or travel management company. This is problematic and costly for a number of reasons:
- You don’t have accurate data to demonstrate your travel spend and frequency – suppliers often extend preferred rates and discounts based on volume
- Preferred rates and useful discounts your company has secured are not being used
- You could be spending significantly more
- Your travellers are spending too much time doing internet research
Expanding on the above example, by clearly outlining booking procedures, a corporate travel policy also reduces the amount of time employees spend researching and booking their own travel arrangements, thereby freeing them up to be more productive on the job. Whether you direct your employees to contact a travel advisor at their travel management company, or you’ve implemented an online booking tool, both options significantly expedite the booking process for all employees by providing instant access to all published rates and inventory which are within policy.
As touched on above, a corporate travel policy plays a vital role in the negotiation and enforcement of preferred rates. For companies doing large-volume travel, the ability to clearly demonstrate how often you book with a specific vendor is integral in order to secure discounts or useful add-ons for your business travel. Once these lower rates are negotiated, it is imperative your business travellers use these vendors; in this way, the company will begin to realize savings. Negotiated rates can be secured with airlines, hotels and vehicle rental vendors. The corporate travel policy will communicate to your employees what is expected of them concerning travel. Over time, you may gain even better rates, based on the amount you have spent with a specific vendor.
If your traveller’s plans change unexpectedly or they find themselves in an emergency, your travel policy should clearly communicate what action to take so they are prepared ahead of time. It should detail your company’s communication procedures while also explaining what actions to take in a particular set of circumstances. For example, in the event that a computer glitch or severe weather has caused last-minute flight cancellations, your business traveller will know instantly who to contact at any time of day.
In times of trouble, it is important you and your travellers know how to stay in touch and all parties are well-aware of their responsibilities.
A corporate travel policy details parameters for meals, tips, entertainment, alcohol consumption and much more to provide concrete guidelines for expenses and expense reporting. It can also mandate the usage of an expense tool, which will help manage traveller receipts, therefore making expense reporting more efficient. These tools can save considerable time and effort for both the traveller and your accounting department, providing itemized reports in a clear, concise manner.
Employees need a clear understanding of how to conduct themselves and what the rules and expectations are of them while they’re on the road and representing their company. A corporate travel policy will outline these guidelines and remove any questions the traveller may have.
It can be difficult to keep track of the comings and goings of all your employees when they’re frequent travellers, not to mention the expenses. With corporate travel being noted as the second biggest controllable expense on the company ledger, a comprehensive, updated travel policy helps control costs, set clear expectations, mandate tool usage and much more.
If you don’t already have a travel policy, your travel management company can assist you with developing one based your company’s unique culture, travel behaviours, negotiated rates and policies.
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