A Guide to Travel and Expense Policies

It is time to rethink travel and expense policies throughout the business travel experience. Business leaders once thought of travel policies as separate from expense policies and therefore relied on multiple, disconnected technologies to set policies, handle expense reports, and even file receipts for air travel, car rentals, and hotel rooms. Once teams realized that entertainment expenses spent to win a big client were no different from airline tickets to meet and build relationships with that client, they started to think about a different solution.

As technology became more advanced, they wondered if there could be an easier way to automate the expense process and skip reimbursement requests, as well as separate personal travel spend from business travel spend without the hours spent taking photos of receipts. Then COVID-19 happened and it suddenly didn't matter the business reason for being abroad, teams had to get their employees on a business trip home safely and communicate with them in an instant. Everything was a business expense, but nothing was clear.

Gaps in Travel Expense Policies & Technology Revealed in COVID-19

One of the major gaps revealed throughout the COVID-19 crisis was how little travel managers and finance leaders were prepared when the external factors shifted the realities surrounding their travel policy, expense policy, and overall approach to business travel and expense. These leaders need to take action quickly, make adjustments to travel and expense policies and programs, and have real-time information to base those decisions on.

Companies found serious gaps in their approach because they’re relying on a “legacy T&E system” built 25+ years ago with disconnected systems, multiple vendors and siloed data. Simply put, they did not deliver against business needs or business objectives.

If employees were on a business trip as borders closed, it wasn’t clear what qualified as a reimbursable expense in case of emergency, and they hesitated to purchase airfare or hotel rooms that were outside the usual allowance for business expenses. Some business travelers found themselves considering a rental car for international travel so they could cross borders and get home as quickly as possible. In many cases, only business-class or first-class seats were available for air travel — and these are not usually allowed as reimbursable expenses. The company leadership wanted to be there for their employees, but found it difficult to communicate so many updates one after another. Ultimately, business travelers were left making decisions not knowing what would happen when it came time for expense reporting.

Why was it so difficult to bridge the gap between companies and their traveling employees? How could human resources departments leave their employees wondering what they could spend in order to get home? Couldn't there be a simple way to increase per diem rates in the case of an emergency?

In almost all legacy T&E models, workflows are complex and “hard coded” so not easily changed or updated. Travel managers often have several operators possibly including an Online Booking Tool (OBT), a Travel Agency or Travel Management Company (TMC), a Payment Card, an Expense solution, Itinerary management, supply from a GDS or OTA, and other outsourced providers including Duty of Care and Analytics.

The difficulty in keeping abreast of changes and communicating travel and expense policy--including a crisis reimbursement policy, emergency travel arrangements, and unexpected airfare--left traveling employees dipping into their personal funds with uncertainty as to what would be reimbursed. These were not dry cleaning type of expenses either... but international airfare spiked by the crisis.

What happened to the employee on a business trip armed with nothing but their personal credit card? The communication with headquarters around permissible business expenses became confused. They were uninformed. They started making travel plans and booking car rentals, hotel rooms, and airfare for international air travel outside of the program.

From a safety perspective, with data not accessible in real time, managers were left blind to traveler location and activity...they couldn’t help them get home safely. Expense reimbursement was not a priority at that moment, but about to become a big problem down the road.

A Persistent Problem Travel Expense Policy & Technology

Many of these problems around travel expenses, expense reports, personal credit card use on business trips, and the hassle of explaining permissible charges with a business purpose have been a problem that COVID-19 simply exposed to the greatest degree.

The general “clunkiness and lack of efficiency” of outdated travel expense management solutions meant traveling employees spent hours to book and change travel, file reports, calculate mileage rates and meal expenses, and save original receipts. They drained employee productivity in the field and in the back office.

A poor user experience also led to lower adoption rates, which meant significant travel arrangements were made outside of the program (and potentially out of policy). Once a business traveler organizes a car rental or makes a reservation for a business meal, only to appear with no booking confirmed, it is unlikely that they’ll ever take that chance again.

In terms of overall employee productivity, managing all of this burns valuable time for the traveler and for the travel manager. Finance teams have been bogged down connecting the dots on expenses, spending hours or weeks reconciling expense reports, rejecting personal expenses, and reviewing their rental agreements and insurance coverage with suppliers. Without real-time visibility to the travel expense policy and subsequent spend, costs are not in control. Without visibility to travel expense decisions, adoption is not guaranteed and employee safety is at risk.

The underlying problems in the current state of travel expense technology were exposed during this crisis, but have been a drag on productivity and earnings for far too long. As we get back to business in the post COVID economy, it’s important to ask “Is my current T&E solution relevant in the new normal?”

A New Way Forward for Travel Expense Policy & Technology

Travel managers, business travelers, and executives intent on building a business that scales need a modern end-to-end T&E solution to integrate all elements of travel expense policies and solutions in one platform.

This “ideal state” combines one online booking tool with global inventory and travel agents, itinerary management and traveler care, payments and expense, which tie to policy and compliance, reconciliation, and duty of care -- all built on a modern cloud-based stack that delivers exceptional travel experiences.

What could that mean for your company? Data-driven insights, smarter workflows, and aligned incentives with the traveler so travel and risk managers can make smarter decisions around travel and expense policy, and to ensure business continuity and recovery. It will empower leaders from the vice president to the team manager to adjust travel and expense policies immediately based on business needs, while having real-time visibility to travel and spend activity.

Data visibility at every level leads to an exceptional, streamlined experience for your travelers who can use mobile apps for payments and for bookings -- quickly and with confidence -- while on the go. With travel and expense being the second largest controllable expense for companies, there are real business benefits to a modern travel and expense platform. There are so many benefits of instituting one seamless flow from booking travel through getting reimbursed for their expenses.

A single platform to set policy, manage, and approve all travel and expense factors:

• Online/mobile booking tool and global travel agency (which gives you unrivaled inventory, fulfillment, and 24x7 global travel agent support);
• New payment technology (both physical and virtual corporate cards so nothing changes with existing Central Travel Accounts);
• Itinerary management; and
• Automated expensing with a payment solution that essentially eliminates the expense process for employees while ensuring that they are in policy.

A New Vision for Travel and Expense Policies

There should be an easy flow between the travel managers who set and adjust travel and expense policies, how that is communicated to the business traveler, how the employee is able to spend that money via credit card or corporate card, and finally how the expense report is compiled and reviewed. What if we could remove the concern around reimbursable charges all together because: (1) communication was so fluid, (2) travel policy and expense policy was baked into systems, and (3) business travelers felt that they were on the same team as their travel managers?

Navan can make all of that happen today. Everything from parking fees to hotel reservations, ground transportation to rental vehicles, can become part of a fluid system designed to handle employee expenses as easily as possible. High performers charged with corporate travel as part of their role shouldn't be relying on personal use of their credit card to handle travel costs. It shouldn't be on their shoulders to report taxable income for dollars spent on a client or hesitate to add gratuities because they're not certain that their Visa can cover it. They shouldn't not answer their cell phone while traveling abroad for fear of fees not included as business expenses. Their safety is important and shouldn't be questioned when they go to sign a damage waiver at a rental agency. Conference attendees shouldn't be scared to ask for the registration fee. Business travelers are the face of your company to non-employees.

Navan travel expense policy settings offer deeper customization and control, including custom travel expense policy levels that enable travel leaders to ensure certain employees can travel when permissible; destination restrictions by policy level that ensure essential business travel can continue by permitting travel to specific locations within policy level; and the continued ability to blacklist travel by continent, country, and city.