5 Best Practices for Business Travel Policies

An effective business travel policy is a key part of managing travel expenses, as it helps ensure employee safety and enhance overall productivity. Here are five best practices to help you develop a robust business travel policy for your organization.

1. Set Clear and Concise Guidelines

Establishing clear and concise travel guidelines is foundational to any effective business travel policy. Here are several key aspects to consider: Purpose and Scope: Define the purpose of the travel policy and to whom it applies. Specify whether the policy covers both domestic and international travel and which departments or roles are subject to the guidelines.

Travel Arrangements: Detail the process for booking flights, hotels, and car rentals. Specify preferred suppliers and any restrictions such as class of service or types of accommodation.

Expense Categories: Clearly outline what expenses are reimbursable and which are not, including transportation, lodging, meals, and incidental expenses. Providing specific examples helps prevent misunderstandings.

Per Diem Rates and Limits: Set daily allowances for meals and other expenses and define the limits for various types of expenditures. This helps control costs and gives employees clear expectations for budgeting their trips.

Reimbursement Procedures: Explain the process for submitting expense reports, including required documentation and deadlines.

Behavioral Expectations: Outline the expected conduct of employees while traveling on behalf of the company. This list can include guidelines on alcohol consumption, appropriate attire, and professionalism in various situations.

Consequences of Noncompliance: Clearly state the consequences of failing to adhere to the travel policy. Ramifications could range from denial of expense reimbursement to disciplinary action. Transparency in this area encourages compliance and accountability.

2. Approval Processes

A well-defined approval process for travel requests is essential to control costs and help ensure that travel aligns with business objectives. Here's how to effectively implement an approval process:

Approval Hierarchy: Establish a hierarchy for travel approvals. Define who can approve travel requests at different levels within the organization. For example, lower-cost trips might only require a manager’s approval, while higher-cost or international trips might need approval from senior executives.

Criteria for Approval: Set clear criteria for approving travel requests, which can include the purpose of the trip, estimated costs, and potential benefits to the company. Having predefined criteria helps approvers make consistent and objective decisions.

Digital Approval Workflow: Implement a digital workflow for travel approvals, using a centralized platform like Navan to manage travel requests and approvals. This practice streamlines the process, provides transparency, and helps prevent requests from being lost or delayed.

Timeframes: Define timeframes for submitting travel requests and receiving approvals. Encourage employees to submit requests well in advance to secure better rates and reserve ample time for the approval process.

Documentation Requirements: Specify the documentation needed for travel approval, which might include a detailed itinerary, estimated budget, and justification for the trip. Comprehensive documentation helps approvers make informed decisions.

Tracking and Reporting: Recording all travel approvals and denials helps track travel expenses, analyze travel patterns, and identify areas for cost savings. Regular reporting can provide insights into travel expenditures and policy compliance.

Flexibility and Exceptions: The approval process should allow for flexibility and exceptions. After all, urgent or last-minute travel is sometimes necessary. Define a process for handling such exceptions so they can be approved quickly while maintaining oversight.

3. Preferred Suppliers and Booking Tools

Encouraging the use of preferred suppliers and booking tools is crucial for optimizing travel arrangements and controlling costs. Here's a detailed look at how to implement this practice effectively:

Establish Preferred Suppliers: Partner with specific airlines, hotels, and car rental companies to negotiate corporate rates and benefits. Preferred suppliers often offer better pricing, enhanced services, and additional perks such as loyalty points or priority boarding.

Benefits of Preferred Suppliers: The advantages of using preferred suppliers might include cost savings, consistent service quality, and streamlined booking processes. Communicating these benefits to employees encourages compliance.

Centralized Booking Platform: Implement a centralized booking platform like Navan. A unified platform enables employees to book flights, accommodations, and transportation in the same place, so that all bookings are made with preferred suppliers and adhere to company policies.

Ease of Use: Choose a user-friendly booking tool that integrates seamlessly with your travel policy. The easier it is for employees to use, the more likely they are to comply with the policy. Features like mobile access, automated expense reporting, and travel alerts can enhance the user experience.

Tracking and Reporting: Leverage the booking tool to track travel expenses and compliance. The platform should provide detailed reports on travel spending, supplier usage, and policy adherence. This data is invaluable for identifying trends, managing budgets, and negotiating better deals with suppliers.

Enforce Policy Compliance: Set the booking tool to automatically enforce travel policy rules such as booking restrictions, preferred supplier options, and expense limits. Automation reduces the risk of policy violations and results in consistent application of the travel guidelines.

Continuous Evaluation: Regularly review and update the list of preferred suppliers based on performance, employee feedback, and market conditions. Maintaining strong relationships with suppliers and staying informed about industry changes helps secure the best deals and services.

4. Expense Management Systems

Implementing an automated expense management system simplifies the expense reporting process and enhances overall efficiency.

Here are the key components to consider:

Automated Expense Reporting: By using an automated system to streamline expense reporting, employees can easily submit receipts and expense reports through the platform, reducing the time and effort required for manual reporting. Navan offers an integrated solution that simplifies this process.

Real-Time Expense Tracking: Enable real-time expense tracking to monitor spending as it happens. This feature helps employees stay within budget and gives managers immediate visibility into travel expenditures. Real-time tracking also allows for quicker identification and resolution of any discrepancies.

Policy Compliance: Configure the expense management system to automatically enforce travel policy rules, such as. setting expense limits, flagging non-compliant expenses, and providing prompts for required documentation. Automated compliance creates consistency and reduces the risk of policy violations.

Receipt Management: Simplify receipt management by enabling employees to upload receipts via mobile devices. Optical character recognition (OCR) technology can automatically extract relevant information, which reduces manual data entry and errors.

Integration with Financial Systems: Choose an expense management system that integrates seamlessly with your organization’s financial systems. This integration facilitates accurate and timely reimbursements, better budget management, and comprehensive financial reporting.

Analytics and Reporting: Utilize the system’s analytics and reporting capabilities to gain insights into travel spending patterns. Detailed reports can help identify areas for cost savings, monitor compliance, and support strategic decision-making. Customizable dashboards and reports provide valuable data at a glance.

User Training and Support: Provide training and support so employees feel comfortable using the expense management system. Regular training sessions and accessible support resources help maximize the system’s benefits and encourage user adoption.

Continuous Improvement: Review and update the expense management system regularly to incorporate feedback from users and adapt to changing needs so the system remains effective and relevant.

5. Duty of Care

Prioritizing employee safety through a comprehensive duty of care plan is essential for any business travel policy.

Here are key aspects to consider for maintaining the well-being of your traveling employees:

Emergency Contact Information: Before employees travel, provide them with a list of emergency contact numbers such as local emergency services, the nearest embassy or consulate (for international travel), and a 24/7 support line from the company.

Travel Risk Assessment: Conduct a thorough risk assessment for each travel destination. Evaluate health risks, political stability, crime rates, and natural hazards and provide employees with up-to-date information about potential risks and safety precautions relevant to their destination.

Health and Safety Guidelines: Offer clear health and safety guidelines tailored to each destination, including information on vaccinations, local healthcare facilities, and safety measures such as avoiding certain areas or using only licensed transportation.

Travel Insurance: Ensure that all employees are covered by comprehensive travel insurance that covers medical expenses, emergency evacuations, trip cancellations, and other unexpected costs. Communicate the insurance coverage details and how to access it if needed.

Crisis Management Plan: Develop a crisis management plan that outlines the steps to be taken in various emergency scenarios. This plan should include evacuation procedures, communication protocols, and roles and responsibilities of key personnel. Regularly review and update the plan.

Tracking and Communication Tools: Use technology to track employee locations and maintain regular communication. Mobile apps and GPS tracking can help monitor employees' whereabouts, while communication tools such as instant messaging and emergency alerts help you quickly reach them in a crisis.

Pre-Travel Briefings: Conduct pre-travel briefings for employees to educate them on their trip’s risks and safety measures. These briefings should cover local laws, cultural norms, and emergency procedures. Providing this information beforehand helps employees feel prepared and confident.

Support Services: Offer access to support services such as medical assistance, travel security consultants, and mental health support. Employees should know how to access these services and feel assured that help is available.

Feedback and Continuous Improvement: Create a system for employees to provide feedback on their travel experiences, particularly concerning safety and security issues. Use this feedback to continuously improve the duty of care plan and address emerging risks.

Legal Compliance: Ensure your duty of care plan complies with relevant legal requirements and industry standards. This includes adhering to regulations regarding employee safety, data protection, and corporate liability. Compliance helps protect employees and reduces legal risks for the company.

By implementing these best practices, your organization can create a business travel policy that controls costs and supports employee well-being and operational efficiency.

Navan’s all-in-one travel and expense management solution can help streamline the policy process. Book a demo today.