What is the Purpose of a Travel and Expense Policy?

Source: nextprocess.com

The operation of companies has changed a lot in recent years, compared to the way of working and the way of functioning that was practiced before. So, for example, today more and more people travel and go to conferences, meetings, and organized events outside the country to do great networking, present the company, etc.

Certain rules were made for those trips according to which the employees must be guided. Travel policies are often overlooked by businesses and employees alike, and lately, attention has been paid to them on the Internet through blog posts like the one you can find on blog.happay.com. While they provide some peace of mind, they also present unique challenges. What should you consider before creating or updating your company’s travel policy?

A travel and expense policy (TEP) is a document outlining your company’s rules regarding travel expenses. In essence, they outline whether or not you can spend money on business-related activities outside of working hours. If your employer has a policy, you should read the fine print to determine exactly what you’re covered for. It could include things like free meals, hotel accommodations, and other perks.

Source: spendesk.com

In today’s corporate environment, traveling for business purposes has become an integral part of modern life. Business trips account for a significant portion of employee time away from their home locations. As such, employers must carefully manage these expenses to ensure cost control and productivity levels remain high. From there comes the need to assemble these important policies.

Employers who fail to adequately plan for business travel risk financial losses due to increased costs associated with unexpected expenses incurred during business trips. Companies can mitigate this risk by incorporating regular procedures for managing travel expenses into their internal processes.

However, all those expenses and trips need to be regulated in a certain way to achieve the effect of stability, but also to know what funds can and cannot be spent. So let’s see together what is the specific purpose of this type of police and what you need to know about them. Let’s get started!

What is the purpose of a travel and expense policy?

As more and more companies begin to travel and go to various business meetings outside the city or state in which the companies are located, the number of expenses increases, as well as the way money is spent. That’s why such a solution was found. A travel and expense policy allows you to reimburse employees for business expenses such as air tickets and hotel stays when traveling outside the city or country in which the company they work is located.

If you give an employee a blank checkbook, they may spend money frivolously during company trips. Limiting how much individuals can spend, ensures that everyone uses funds wisely. In this way, the order of expenses is established, the direction of all activities during the trip is given, but also a record is kept of what was paid, how much was spent, etc.

Is it important for every company to have a travel and expense policy?

Source: happay.com

Yes! A travel and expense policy is an integral part of any business’s overall risk management plan, which could prevent a large number of things that the management would not want to happen. The purpose of a travel and expense policy is to protect the company from potential liability, minimize expenses incurred, and maintain compliance with various laws regarding travel and expenses.

In this way, the company ensures a smooth flow of trips related to the company’s operations, and it is also guaranteed that money will not be spent on things that are too expensive, that are not part of the business visit or that will be wasted. money on impermissible things. If you don’t have a policy in place, you could be at risk of losing a lot of money in case of litigation. That is why your company must have such a policy, which will be of great help during regulation. Once your policy is in place, use Coupa’s software to help you manage all travel expenses (https://www.coupa.com/products/travel-expense-management/expense-management)

What does a travel and expense policy need to contain?

In this type of policy, it is necessary to specify in detail all the important things that refer to this kind of document. There needs to be language regarding what expenses are covered if the employee becomes sick or injured while traveling. This includes flights, accommodations, car rentals, food, drinks, gifts, etc.

Also, if the company provides insurance for these types of situations, then they should also provide language about how an employee’s claim will be handled. An example might be “If you become ill or injure yourself during a business trip, we will cover medical/surgical costs up to $10,000.”

Of course, all trips must be approved before commencement. Expenses incurred for personal reasons such as weddings or birthdays should be excluded from coverage. All these things need to be clearly stated, clarified, and explained. Also, the company itself can make a decision whether something additional will be listed or excluded, and of course, this policy can be changed depending on the needs of the company and depending on its operations.

Who participates in the drafting of the travel and expense policy?

Source: learn.g2.com

It is important to know that the entire company participates in the drafting of these documents, which means that a team of employees who are experienced and who will be able to compile such an important document is being created. If you’re traveling for business purposes, the employee must submit all expenses related to the trip on his/her personal credit card, which is later reimbursed by the employer.

Expenses include meals while at conferences, hotel rooms, internet access fees, transportation costs, tolls, parking, etc. All expenses must be approved by a manager or supervisor. All these things need to be known by the work team, discussed with the management, and decided which expenses will be covered by the company and which will not be included in the trip.

Although most of you were not familiar with this type of document that internally governs a company’s rules regarding flights, now you know all the important things. All that is required is to initiate a check of such a document in your company, to prepare a new one, or to confirm that the last version is valid and correct in terms of the rules.