Business travel has seen massive changes in the last five years, and expense reimbursements are now harder to manage than ever before. In this article, we share an expense policy template and guidelines to make sure employees submit the right information from the get-go.
A travel and expense policy is a collection of guidelines outlining how individuals should plan business-related travel, which expenses are eligible for reimbursement, and how reimbursements are managed. It outlines the company's dos and don'ts for all permitted business trips in order to prevent fraud and save expenses by enhancing budget transparency.
Having such a policy is crucial for simplifying travel and expense (T&E) management procedures, rendering company costs more predictable, and assisting employees in understanding the spending caps of an approved business trip. This also goes a long way in improving the employee experience.
Before we go through the business travel and expense policy template, let us look at what your policy should contain.
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A robust policy on travel and expenses should anticipate all possible questions from all stakeholders. When is it possible to upgrade or downgrade between business class and economy class on flights? Can non-employees accompany a business traveler? Are there distinct sets of regulations for local and international travel?
Typically, a company's finance and human resources departments are responsible for drafting its travel and spending policies. If an organization has a designated manager for business travel, they may also participate.
Since the standards should be unambiguous and comprehensive, a travel and expenditure policy is generally extensive.
The template we share should act as a guide, and HR managers need to customize and extend it as per their needs. But no matter which travel and expense policy template you choose, it should have the following sections:
Now let us go through a policy template that covers these elements, and other essentials.
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The following T&E policy template has 12 sections, covering the most important sections you need. You can expand or add to the clauses to tailor the policy as per your organizational culture, budget, and nature of business:
This policy is intended to:
The policy of the organization is to compensate workers for any required, acceptable, and genuine expenditures incurred while traveling on approved business.
The documentation and approval of travel costs must be listed on a travel expense statement. Each employee is responsible for adhering to business rules while making work-related purchases. In addition, it is the manager's job to comprehend the reasons for the expenditures and ensure that they've been reported in accordance with the established policy.
Although these rules are meant to be exhaustive, it is difficult to anticipate every circumstance a traveler may experience. The traveler is required to follow these recommendations conservatively, commensurate with normal living standards, and use sound business judgment in situations where the policy has been exceeded by evolving circumstances.
Our organizational travel agency is <travel agency name>. Travel plans may be scheduled with any agent who is available. The local office's telephone number is <(xxx) xxx-xxxx>.
The travel agency will be tasked with finding the most affordable tickets and housing costs. If you must stay at a hotel that is more expensive than the allocated hotel, you must provide enough reason prior to making travel plans. The same policy applies to automobiles, air travel, etc.
LFR: All individuals flying with an airline must choose the Lowest Fare Routing (LFR) option. LFR is quoted as the minimum rational price for the business trip, (where possible).
Approved travel class: Business, as well as First Class travel, isn't permitted unless the employee pays for it. Employees engaged in airline reward programs may utilize their private upgrades in conjunction with the company's reservation at the lowest available rate.
Stopovers: Stopovers en route that are reasonable may be permitted, given that:
Chargebacks: Airline tickets are deemed legal tender and should not be misplaced or discarded. Please return any unused tickets or ticket sections to the organization. After that, the tickets will be remitted to the travel agent for credit. Do not return unused tickets to the airline or travel agent directly.
Car rentals are often the most expensive means of transportation and ought to only be used when local transit is impracticable or more expensive because of the nature of the journey or the sites being visited. Note that the taxi driver must acquire documentation for the fare charged.
Please note that automobile rental volume discounts apply. When you make your bookings, the travel agents will be able to inform you of the car rental company we use.
A predetermined sum of <$xxx> per mile or km> shall be paid for each mile or kilometer traveled for business purposes in a privately-owned vehicle permitted for business use and driven for such purposes.
At the time hotel bookings are made via the company's tour operator, the best available pricing for rooms of reasonable quality in the most suitable area will be arranged. The passenger should confirm, upon arrival, that the rate displayed on the schedule is the price they get.
Typically, the employee should choose establishments that are appropriately priced for the area and compatible with regular living conditions.
Date, amount, location, and description of the nature of the business must be included for business dinners with customers or other colleagues. Include a list of the names of those who were entertained.
Only wine and bar expenses linked only with a work meeting and not exceeding $xxx> per individual present are reimbursable. Employee entertainment isn't a reimbursable cost.
Employees traveling for work are authorized to make an appropriate number of long-distance calls home to confirm their arrival, make preparations for their return, and take good care of urgent personal problems that cannot wait.
Regular business travelers will be issued with calling cards for local and long-distance calls while on the road.
A cash advance of up to <$xxx> per day of business travel may be requested by filling out a Request for Cash Advance application.
All travel advance requests must be authorized and sent to the Accounts Payable division at least three working days before the traveler's departure.
<authority> regulations demand that traveling employees maintain a proper record for each trip and display all essential information to support each expense (who, what, why, when, as well as how much).
The due date for expense reports is <e.g., thirty (30)> days following the first expenditure.
Entertainment expenses incurred in the course of achieving business objectives must be evidenced by invoices for all expenses and supporting documents outlining the dates and locations of entertainment, the names and number of individuals involved, the business relationship between all parties, the business purpose, and the amount of each individual expenditure.
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Remember that there’s no hard and fast rule when it comes to adhering to a T&E policy template. Companies around the world customize their policies as per their requirements; here are a few notable examples.
The expense policy at Netflix consists of simply five words: "Act in Netflix's best interest." It aligns with Netflix's general cultural code, which has a comprehensive subsection on freedom and accountability. For example, the company's maternity leave policy includes the phrase "take care of your baby and yourself" and specifies that new parents often need 4 to 8 months.
The policy document for BBC's business travel and expense reimbursement is extremely detailed. In addition to being consistent with the company's employee-centric culture, there are laws limiting "late night/early morning transport" (LNEMT), which is reasonable given the operational hours of its business. If payment from the BBC was delayed, and this was the basis for the interest, employees may claim credit card interest expenses.
FedEx's policy reads more like a legally binding document than a statement of guidelines. Page one of the policy specifies that "termination" is a potential consequence for workers who violate the policy. It is a good idea to spell this out and avoid legal ambiguity later on.
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Policies for business travel and expense reimbursement are meaningless unless you have a system to enforce them. That’s where T&E management software like Darwinbox comes in.
With a unified platform, you can integrate your expense policy with payroll and attendance and automatically receive information to simplify expense reimbursements. Schedule a demo with Darwinbox to learn more!