3 travel policy recommendations to boost employee peace

Two things are clear about business travel. First, based on the results of the travel policy survey by AP Now and PDG, it can be challenging for organizations to manage the related expenses and applicable policies. As the lead researcher for the survey project, I am seeing firsthand the pain that reimbursement teams often encounter. Besides regular battles over missing receipts and other infractions, there are, at times, outrageous expenses to address. More on this below. The second thing about business travel emerged during a lively weekend dinner party with friends. In short, travel is not pleasant (my friends used stronger language) and employers’ policies can make things more difficult on travelers. What can organizations do to help alleviate everyone’s sore spots? Keep reading to learn more, including some insights into the survey results.

Characteristics of a Strong Travel Policy

Consistent enforcement should be a given. Beyond that, here are three elements that appear to be lacking in some organizations, based on the survey results I’m currently analyzing.

Regular Reviews and Updates

Your policy should keep pace with the changing travel landscape. Reviewing it at least annually and making updates as necessary can prevent headaches. The survey results reveal there is room for improvement; for example:

  • Only 56% of organizations have reviewed their policy within the past 12 months
  • 72% have not updated their policy to reflect employees’ use of Uber, Lyft, and similar

Unfortunately, even the diligent organizations can overlook things. Among those who have done a review within the past 12 months, 60% said the policy does not address Uber, Lyft, and similar. 

Clarity and Specificity

It is not possible or recommended to try and address every potential situation within a travel policy. There are too many variables. However, many survey respondents—from the perspective of someone on a reimbursement team—expressed a desire for more details in their policies to minimize conflicts and debates with travelers. I completely agree.

While reviewing outrageous expenses described by respondents, I took the liberty of compiling a list of what an organization could specify in a “prohibited expenses” section of the policy.

ABC Company will not reimburse/pay for: 

  • tickets for driving violations or parking infractions
  • personal car repairs
  • gifts for family and/or friends
  • personal services (e.g., spa services)
  • personal items (e.g., clothing, medicine)
  • personal entertainment (e.g., concert tickets, gambling)
  • pet care or child care
  • expenses incurred by non-employee guests of the traveler
  • expenses occurring during non-travel days

Based on this list, you can imagine what respondents shared!

Help bring some peace to both your reimbursement team and travelers. Make your travel policy current and clear, but also flexible.

Help bring some peace to both your reimbursement team and travelers. Make your travel policy current and clear, but also flexible.

Flexibility

This third piece may sound like a contradiction to consistent enforcement. What I mean by “flexibility” is to allow reasonable exceptions when approved by an appropriate management member, especially when the traveler saves the organization money overall. For example, a traveler taking a red-eye flight when it is the cheapest option, but then purchasing a seat upgrade to be more comfortable. It also saves the cost of another night of lodging. 

I know “reasonable” can be subject to interpretation, which is why it is important to be clear about prohibited expenses (things for which exceptions are not allowed), as well as train your management-level travel approvers in order to convey your expectations. Having the flexibility within your policy to make things a little better for travelers can ease their stress and increase job satisfaction. 

Webinar Opportunity

If you are not a survey respondent, but want to hear more about the survey results, AP Now is offering the related webinar for a fee. Please visit http://www.ap-now.com/products/item126.cfm

See also travel-related resources offered by Recharged Education.  

 


About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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A travel expense headache.

Does your travel policy invite issues by leaving too much room for employee interpretation? A big headache for those who manage travel and entertainment (T&E) expenses—often accounts payable—is employees who incur unreasonable or out-of-policy expenses. Keep reading to see one such example (it involves alcohol) plus what your organization can do to minimize these headaches. Finally, if you’re wondering whether your organization is typical when it comes to what is and is not allowed related to T&E expenses, you can take an easy survey to find out; see link below.

They Did What?

The Travel & Entertainment Policy Survey going on now, sponsored by AP Now and PDG, includes a question about the most outrageous expense report situation encountered. One respondent shared that two employees purchased a $350 bottle of wine at dinner (no customers were involved) and requested reimbursement. The employees thought it was completely reasonable. 

Speaking of alcohol, early survey results show a notable percentage of organizations don’t reimburse for liquor. It is too soon to tell if this will remain the most common answer.

What Your Organization Can Do

Regardless of which scenario below applies to your organization, travelers and approvers alike should receive related training and be held accountable for their respective role. If there are no consequences for outrageous expenses, then nothing will deter them from being a repeat offender. In the case of the $350 bottle of wine, I have to wonder about the manager who approved it. 

Scenario 1: Employees Submit Reimbursement Requests

When employees pay for T&E and submit reimbursement requests, the way to prevent issues is by using per diems. Employees can spend what they want, but your organization only reimburses “X” amount, based on your per diem rates. Personally, I am a fan of this approach, as it eliminates battles about what constitutes a “reasonable” expense. However, travelers may feel too restricted by per diems, even when they are adjusted to accommodate higher costs in large markets. 

Scenario 2: Organization Pays for T&E Directly 

When employees use Commercial Cards (e.g., Corporate Travel Cards) for which the bill is paid directly by your organization, it is even more critical to specify, within your policy, what is and is not acceptable. For out-of-policy expenses on a card, the traveler should be required to reimburse the organization.  

With both scenarios, the caveat is AP must spot an out-of-policy expense first in order to take action against the traveler and/or approver. The use of some type of auditing technology can really help. 

Take the Survey

As the lead researcher for the T&E Policy Survey, I’m eager to see what organizations are doing. Survey respondents will receive an executive summary of the results and be invited to a complimentary webinar to see more results, including some best practices. Click here to take the survey.

No need for pain reliever when your organization has a comprehensive travel policy that it consistently enforces.

No need for pain reliever when your organization has a comprehensive travel policy that it consistently enforces.

How Comprehensive is Your Travel Policy?

Does your current policy prevent outrageous expenses? While “comprehensive” is subjective, AP Now’s 2016 T&E survey (www.ap-now.com) revealed that the majority (44%) of respondents rated their policy as comprehensive. Others were more negative; 37% said it is somewhat comprehensive and 11% said not at all. Does your policy overlook certain topics? Take the current survey to help you begin to evaluate your policy status.

See also travel-related resources offered by Recharged Education.


About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

Subscribe to the Blog

Receive notice of new blog posts.

Virtual Cards for travel have arrived.

Incorporating Virtual Cards into business travel processes has been a growing trend for a while now. The most popular target is airfare, which is understandable since the reservation and payment occur electronically pre-travel. What about hotels? I have always wondered how well Virtual Cards work for lodging expenses. Then I came across a July 6 article published by Business Travel News (BTN) that sheds light on this topic. Following are some tidbits plus keys to success that can help you determine whether Virtual Cards might have a place within your organization’s travel management initiatives.

Virtual Card Usage with Hotels

For The Advisory Board Company, Virtual Cards are filling a need, as described within the article, A Travel Program & Its TMC Start Virtual Card Programs Together, by JoAnn DeLuna, Associate Editor, Payment & Expense, The BTN Group/Northstar Travel Group. I was most intrigued by their process, which relies heavily on the travel management company (TMC). Once the program expands to employees—it began in January for job candidates—their TMC will:

  • obtain a Virtual Card number from the card provider via an application programming interface (API); the spend limit will cover the room rate, taxes and fees
  • communicate the Virtual Card information to the hotel and follow up prior to the traveler’s arrival date

The Advisory Board Company recognizes the importance of travelers not having a negative experience, so they are working closely with their TMC. This is a critical piece. I have always envisioned issues related to hotels. With more organizations turning to Virtual Cards, hopefully hotels will respond with strong procedures and employee training. This would reduce the extra work by TMCs and/or organizations, and minimize potential pain to travelers. If the process is too onerous, Virtual Card usage for lodging could be limited.

When lodging is secured with a Virtual Card, will travelers receive the service they need when checking in?

When lodging is secured with a Virtual Card, will travelers receive the service they need when checking in?

Keys to Success

Interested in using Virtual Cards for lodging? Following are some key aspects to consider.

  • Partner with a travel management company (TMC) that can support Virtual Card usage
  • Work with your card provider to identify the best Virtual Card process for your organization and, perhaps, the best hotel targets
  • Ensure there are benefits to your organization, as well as individual travelers
  • Plan for potential hiccups, such as hotel clerks who do not understand the Virtual Card arrangement, and prepare your travelers
  • Recognize that employees will still need a form of payment for meals, incidentals, etc.; Commercial Cards provide advantages over personal cards

Like anything, there are pros and cons, but, with proper planning, Virtual Cards can be a viable option.

Resources

To learn more about Virtual Card usage by The Advisory Board Company, including their program goals, details about the process, and status to date, access the complete article at: http://www.businesstravelnews.com/Procurement/A-Travel-Program-Its-TMC-Start-Virtual-Card-Programs-Together.

See also travel-related content from Recharged Education, including how Declining Balance Cards can be a good fit, and more information about Virtual Cards.


About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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