8 Top Tips to Increase Compliance with Your Company's Travel Expense Policy
Travel and expense (T&E) policy compliance is an important issue in businesses of all sizes. You see, travel and employee related expenses are the most common type of business expenses incurred by a company. Without a dedicated travel and expense policy policy in place, as well as company-wide compliance, these expenses could dramatically eat into your business’s bottom line.
In this guide, we not only reveal everything you need to know about a travel and expense policy, but also share our top 8 tips to increase travel and expense policy compliance within your company.
Table of Contents
- What is a Travel & Expense Policy?
- Why is a Travel & Expense Policy Important?
- How to Increase Your Company’s Travel and Expense Policy Compliance
- The Top 8 Tips to Increase Travel Expense Policy Compliance [Recap]
What is a Travel & Expense Policy?
Before we reveal our travel and expense policy best practices, let’s look at exactly what a travel and expense policy is.
A travel and expense policy outlines the responsibilities and duties of business travel in regard to expenses. It lays out a clear direction for every employee to follow in order to maintain the validity of their costs. Additionally, it helps them use sound judgement when spending and reporting company expenses.
A travel and expense policy also identifies and describes the types of costs that an employee must report. It goes through each area in depth and explains how to track and report that specific company expense.
These categories usually include:
Corporate credit card expenses
Medical and insurance expenses
Food and beverages
Why is a Travel & Expense Policy Important?
A travel and expense policy is essential for a variety of reasons. It boosts the bottom line, prevents occupational fraud, simplifies the booking and reimbursement procedure, and aids in compliance with tax laws.
Processing expense receipts, verifying expenses, auditing, and reimbursing employees for out-of-pocket expenses all need a significant number of resources. A clearly defined travel and expense policy can significantly simplify the process.
It also helps employees to have a clear understanding of what they need to do before, during, and after a work trip if a set travel and expense policy is in place.
How to Increase Your Company’s Travel and Expense Policy Compliance
Here’s our 8 top tips to increase travel and expense policy compliance in your company.
1. Write a clear and concise travel and expense policy
Your travel and expense policy should contain clear advice on matters such as approval procedures, points of contact, desired booking channels, regulations for using corporate credit cards, gifts, and favours. Additionally, it should include a list of expenses that your company won’t allow under any circumstances.
Be sure to also explain the essential concepts of your business policy to your staff so they understand why the regulations exist.
2. Ask for feedback
Another way to ensure travel and expense policy compliance is to confirm with your employees that they understand every aspect of it. Give your staff time to read through the document carefully, then ask for feedback regarding what makes sense and what doesn’t, as well as any other queries they may have. This is a great way to get on top of travel and expense policy confusion before it wreaks havoc.
3. Communication is key
Simply emailing the policy to your staff isn’t enough. Instead, make it an official conversation, whether at a company event, training session, workshop, team meeting, or team lunch. This further opens up a two-way dialogue and keeps your travel and expense policy at the forefront of their minds.
4. Educate your employees
Develop a travel policy education program that covers everything from your online booking tool and the pre-trip approval procedure to mobile applications and how to track expenses on-the-road.
This education should be incorporated into the onboarding process for new workers, and you can also organise training to remind experienced staff of the necessity of following travel policies.
5. Use expense management software
Expense management software, such as ExpenseIn, has simple features that make travel and expense policy compliance easier.
The software reduces expense rejections with automated policy checks and enhances expense policy compliance by requiring employees to approve policies before submitting their claims. This ensures all workers are on the same page when it comes to your travel and expense policy.
6. Analyse your travel and expense data
Your expense data includes a wealth of information about the spending habits of your employees. Determine which costs have the greatest non-compliance rates, and what patterns can be seen among non-compliant expenses? Additionally, what are the reasons for this non-compliance?
7. Provide timely reimbursements
Failing to reimburse a worker’s out-of-pocket travel expenses can create discontent and distrust among your employees. Ensure you have a clear, timely procedure for reimbursements within your travel and expense policy. After all, travel and expense policy compliance is a two-way street, and employees are more likely to be onboard if management is too.
8. Sanction non-compliance and reward compliance
Finally, try to motivate your staff by rewarding those who have the best compliance rates. For employees constantly failing to meet your travel and expense policy, however, warnings should be issued. Take this chance to talk with the employee in question to understand the reasons for non-compliance.
The Top 8 Tips to Increase Travel Expense Policy Compliance [Recap]
No matter what kind of business you run, having a travel and expense policy in place is critical if you don't want to waste your hard-earned profits and/or leave your employees out of pocket for a long time. The Top 8 tips to increase travel expense policy compliance include:
Write a clear and concise travel and expense policy
Ask for feedback
Communication is key
Educate your employees
Use expense management software
Analyse your T&E data
Provide timely reimbursement
Sanction non-compliance and reward compliance