There are multiple reasons why you should set up a strong travel expense policy, not only for the benefit of your company but to maintain open communication within the business. Having this policy will clearly outline the rules and regulations when it comes to expenses.
Setting up a travel expense policy is vital for a company, particularly if you are needing to reimburse employees’ expenses. This article will discuss the key elements of a successful policy and hopefully make life easier for you and the company in the future.
Who’s in charge?
Who’s in charge of your travel expenses is important to consider when constructing a policy. Ideally, there should be an allocated team or group of people who are involved in the development, with an outside person to oversee the document before it is implemented. This should be the first thing you do, as creating a strong team will make all the difference.
If an owner is defined, it makes things easier if someone needs to ask a question or bring something up, meaning less confusion for the company, making things clear and concise.
Outline what’s necessary
The policy should be made clear and will leave employees with a great understanding of the expenses system. Simple language should be used, so it’s understood by all. It should be visually pleasing to read. If titles, headings and subheadings are organized, it will make the overall project more worthwhile. During an audit, you’re attempting to verify that employees have followed your travel and expense policy – which will be much easier if the policy is clear.
Clear time frame
The document should specify how much time employees have when submitting their expense claims, as well as the reimbursement process. Having a deadline allows people to get it done quickly and efficiently, ensuring the information is more accurate and supported by documents. This can also mean there is less likelihood of fraudulent behavior.
Automated solutions like travel payment and expense management software can streamline the travel and expenses reimbursement process, or even eliminate the need for reimbursements altogether.
This way, the information provided by employees, like receipts, can be attached to a document and accounted for. Meaning you’ll get more accurate reporting and better internal controls. This is a great way of managing expenses and can save time for the company.
A process like expenses may not be completely understood by all employees, so it’s important you never assume people know how it works, or what to do. Each employee should ideally receive training, so they have an educated understanding of the processes and the policy document itself.
This will also ensure that all employees know how to use automated systems and lessen the chances of anything going wrong or mistakes being made.
The policy should include a section devoted to enforcement; make it clear that employees who don’t follow the policy won’t receive reimbursement.
Keep the policy up-to-date
Updating the policy is a key part of the process. Specific travel conditions—such as destinations and costs—are likely to change year on year, so you’ll need to update your policy accordingly. Regular meetings should be held throughout the year in order to keep up with said changes, so everyone is on the same page.
This will also provide the chance to implement your auditor’s recommended changes to your policy—and prevent the same issues from arising during your next audit.
The key elements of a successful travel expense policy should now be made clear, so you have more of an understanding of the factors you should consider when creating a policy.
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