A travel and expense policy—also known as a T&E policy—is a dynamic set of guidelines companies create, enforce, and consistently refine to guide employees on business-related travel costs and other expenses. Because every company is unique in its needs and expectations, business travel and expense policies will look and act differently for every organization.
These policy guidelines can include budgets for flights and lodging, how to receive reimbursement for travel expenses, allowable spend for business-related expenses like subscriptions or stipends, or anything in between. In some policies, companies may incorporate preferred airlines and vendors, directions on how to submit expense reports, and guidelines for bleisure travel.
Whatever the scope of the policy may be, having a clear-cut system in place can manage costs effectively while giving employees the freedom to travel and spend confidently.
Rather than scrambling for receipts when employees return from a sales trip or leaving them in the dark while waiting for reimbursements, a dynamic T&E policy can alleviate pain points along the entire expense-management journey.
When financial leaders set clear guidelines for employee expenses, users reap the benefits of:
Without a travel and expense policy, employees may spend at their own pace—costing the company unnecessary dollars—or they may miss out on potentially beneficial business purchases for fear of overspending. When lacking a T&E policy, financial teams may experience poor data visibility; they might miss errors, potential fraud, and duplicate reports.
Expense reports may arrive late or come without essential information since employees aren’t aware of specific guidelines. Other employees may be looking for reimbursement for items that don’t fit a company’s expense categories.
There’s no one-size-fits-all expense-policy template. Financial leaders should ask themselves what their specific organization needs are from a control and spend perspective.
Some questions to ask may be:
Employees may also be curious if they are allowed seat upgrades or options for business class, if they can use their corporate cards with certain retailers, or if they receive points or rewards with certain carriers. It’s also essential that employees understand what is non-refundable and how to document proof of purchase.
Companies can begin by determining if a policy covers all employees or specific teams. Organizations should consider full-time, part-time, and contract employees as well. Who will need spend management around office supplies, entertainment expenses, and sponsored projects may vary significantly.
With a business expense policy in place, and per diems and quarterly budgets set, companies can help teams thrive while keeping finances in check. To do so, leaders should set policies around:
Bottom line: always keep the end-user in mind. While finance, HR, and operations may be involved in writing the policy, it’s the employees who will be spending. Be sure they can understand what’s in it.
Clarity and transparency make up the framework of an efficient T&E policy. However, modern technology now incorporates a level of automation that boosts that transparency and streamlines and enforces the policy in seconds.
With Navan Expense employees can book all travel through the app. This solution can consolidate a company’s travel spend into one place and enable employers to make budgetary decisions quickly based on real-time data.
In combination with the Navan Expense solution and corporate cards, Navan can deploy software into existing systems to create a seamless workflow. Built-in approvals squash out-of-policy spend, and mandatory reporting means no information goes missing.
As companies scale, the technology behind their travel and expense policy should scale with them. With Navan Expense, the policy is baked into corporate travel booking. Users can easily see which hotels, cars, and flights are within their limits and manage them throughout the entire trip.
Whether on a business trip, working from home, or going into the local office, team members can get pre-approval for expenses within their policy for automatic reconciliation and reimbursements. Employees can easily spend what’s necessary to benefit the company, and leaders can feel confident their policies are controlling costs.
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