How to Set a Corporate Travel Policy: Key Elements, Best Practices, and Compliance

A corporate travel policy is a set of guidelines and best practices that govern employee travel. Organizations that have corporate travel policies use them to ensure that all employees follow the proper protocols when booking business-related travel and logging expenses. While travel policies are often standard for large corporations, smaller businesses can also benefit from instituting them.

Benefits of Having a Corporate Travel Policy

Having a corporate travel policy can yield a range of benefits, both for business owners and their employees.

From the perspective of business owners, a corporate travel policy can allow you to:

• Monitor employee travel expenses to ensure accuracy and detect possible instances of fraud.
• Establish guidelines for which hotels, airlines, and other travel organizations employees may book through.
• Ensure that employees understand which travel expenses may be submitted for reimbursement.
• Organize expense data accurately and quickly.
• Remain compliant with IRS tax rules and regulations regarding business travel.
• Minimize waste and streamline your accounting systems.

On the employee side, having a standard corporate travel policy in place can help them avoid a scenario where they may be waiting weeks or months to be reimbursed for expenses they’ve paid out of pocket because the company can’t verify what they spent.

Key Elements of a Corporate Travel Policy

There’s no one-size-fits-all corporate travel policy template or blueprint businesses can follow. That’s an advantage, however, as it allows you to create a travel policy that fits your business’s needs.

Generally speaking, a corporate travel policy should cover rules and guidelines for the following:

• Airline, hotel, and rental car reservations
• Other transportation expenses, such as rail travel or ride-sharing
• Employee spending, as it pertains to meals, entertainment, phone calls, and other necessary expenses
• Parking fees and toll passes
• Acceptance of gifts when meeting with clients, or expensing of gifts presented to clients
• Medical care and travel insurance
• Currency exchange fees and international banking
• Employee submissions of receipts for reimbursement
• Review, approval, and payment of submitted expenses
• Personal safety of employees
• Security of business equipment or documents

When in doubt, it’s better for a corporate travel policy to cover more ground rather than less. Making your organization’s travel policy as comprehensive as possible can help to avoid confusion with regard to which expenses are acceptable and when employees can expect to be reimbursed.

Creating a Corporate Travel Policy

Creating a corporate travel policy is a multi-step process. Breaking each step down can make it easier to manage and create a policy that’s tailored to your business’s needs.

Identify Your Objectives

First, consider what you need a corporate travel policy to do for you. Are you primarily interested in minimizing costs or preventing abuse? Do you want to ensure that employees are booking with approved organizations and taking steps to remain safe while they’re traveling? Considering your top three objectives can offer a good starting point for developing your corporate travel policy.

You can use those insights to draft a purpose statement outlining the policy’s intentions. This doesn’t need to be lengthy but it should convey what the policy is designed to do.

Get Your Team Involved

A corporate travel policy is only as good as its ability to meet the needs of those who are expected to adhere to it. Asking some questions about your team and your business’s travel activities can help you pin down what your policy should cover.

For example, ask yourself the following:

• Do any employees require special accommodations for travel related to a health condition or disability?
• Are there any destinations the business travels to regularly?
• Are there any preferred hotels, airlines, or rental car companies the business likes to use?
• Is there a preferred process for booking trips or answering questions?
• Who will be responsible for approving bookings, answering employee questions, approving expenses, and submitting them for payment?
• How will employees pay for expenses they book?
• If employees are using corporate credit cards, what rules are they expected to follow?
• How will they submit those expenses for reimbursement and what information will they need to provide?

Polling your employees can further inform your decision-making. For example, an employee who travels frequently may know which hotels are better than others or which airlines offer the best rates. Your employees may appreciate being given a chance to share their insights and opinions on what the company’s travel policy should look like.

Draft the Policy and Review It Carefully

Once you’ve collected all the feedback you think you’ll need, you can get to work on fleshing out your corporate travel policy. Again, you want to be thorough in detailing the policies and procedures that you expect employees to follow.

After you’re written out the first draft, go through your policy a second time. Is there anything that could be explained more clearly? Any areas that may cause confusion for employees? Anything you’ve left out entirely?

You may need to review your travel policy several times to make sure you’re covering all of the most important bases. Once you’ve got the language down, you can review it one final time to check for spelling and grammar errors.

Share the Policy With Your Staff

The final step after creating a corporate travel policy is conveying it to everyone in the company who’s affected by it. If employees don’t know what’s in the policy, it’ll be very difficult for them to adhere to it.

Remember that you’ll need to repeat this step any time you make changes to the policy. If you add something new or take something away, it’s your duty to convey that to your employees so they’re aware of the changes.

Best Practices for Implementing a Corporate Travel Policy

Once you’ve created a corporate travel you’ll need to implement it. These tips can help with introducing your company’s travel policy and enforcing it.

• Ensure that employees know who they can direct questions to regarding business travel bookings, expense reporting, and reimbursement.
• Set a specific time frame for submitting expenses for reimbursement and processing payments to employees.
• Consider scheduling an employee meeting or workshop to walk through the details of the travel policy and answer any questions that might arise.
• Ensure that all new hires get a copy of the travel policy.
• Regularly review and update your travel policy if necessary.
• Conduct monthly reviews or audits of travel expenditures to check for errors and potentially detect fraud or abuse.

It’s also important to specify what consequences, if any, employees may face if they’re found to be non-compliant with the policy. That may include having travel privileges restricted or in a worst-case scenario, dismissal if evidence of fraud is found.

Ensuring Compliance With a Corporate Travel Policy

Ensuring compliance with your company’s corporate travel policy is important from a cost perspective, as you don’t want to blow your travel budget. There are different tactics you can use to maintain compliance across all stakeholders.

• Update your policy regularly to reflect the company’s latest practices and guidelines.
• Simplify the policy if necessary to avoid confusion.
• Communicate compliance expectations, as well as the consequences of non-compliance, clearly to all employees.
• Ensure that the policy is detailed thoroughly during the onboarding process for new hires.
• Conduct regular reviews and audits of travel expenses to look for any signs of non-compliance.
• Consider using a business travel management tool or software to keep track of bookings and expense reporting.

You may also place safeguards on travel bookings to prevent employees from straying outside the boundaries of the policy. For example, if you use a corporate travel agency you might direct the agency to automatically reject any attempted bookings that don’t involve a preferred travel partner.

Sample Corporate Travel Policy

Corporate travel policies are common across a variety of industries, from finance to retail to the government. Examples of organizations that maintain corporate travel policies include:

• JPMorgan Chase
• Best Buy
• Columbia University
• U.S. Department of the Interior
• Starbucks

All of these sample policies have similar characteristics, in that they outline the purpose of the policy, specify the rules that apply to booking accommodations, and offer detailed instructions to employees on how to submit expense reports for reimbursement. It may take some time to work out your travel policy but reviewing examples like these can give you an idea of what to add.

The Bottom Line

A corporate travel policy may be a necessity if your employees take regular business trips to meet with clients or prospective clients, attend professional conferences or seminars, or participate in career training. If you don’t have a policy in place yet, you may want to set that as a priority for your business. Having a clear policy to follow leaves little room for misunderstandings and mismanagement of travel privileges.