Importance Of Business Travel Policy To Save Companies Time and Money
- March 27, 2023
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Every company, irrespective of the scale of the business, have employees going out to conduct professional duties. The volume of business travel may also vary depending on the business. But as a business owner or financial manager, it is important to take advantage of a business travel policy and a travel management service. A good business travel policy not only saves time and makes travel easier for the company but has many other benefits, which will be highlighted in this article.
What is a corporate travel policy?
A business travel policy is a set of guidelines and rules that govern how a company’s employees should make travel arrangements, and how they should conduct themselves during business trips.
A typical business travel policy may include information on the types of travel that are allowed, the preferred vendors for airfare, lodging, and ground transportation, allowable meal and entertainment expenses, and guidelines for submitting expense reports. It may also include information on the approval process for travel, guidelines for travel safety and security, and other important details that employees should be aware of when traveling for business.
Importance of business travel policy
The purpose of a business travel policy is to ensure that employees understand their responsibilities when traveling on behalf of the company and to provide them with the necessary resources to plan and book their trips. It also helps companies manage travel expenses and ensures that employees comply with the company’s travel and expense policies.
A business travel policy is important for several reasons, including:
A corporate travel policy can help a company manage and control the expenses associated with business travel. By establishing guidelines on preferred vendors, allowable expenses, and travel arrangements, a company can reduce unnecessary spending on travel.
Compliance with laws and regulations
Companies must comply with various laws and regulations related to business travel. A business travel policy can help ensure compliance with these laws and regulations, including tax laws, immigration laws, and travel safety regulations.
Business travel comes with inherent risks, such as health and safety risks, security risks, and legal risks. A travel policy can help a company manage these risks by establishing guidelines on travel safety and security, insurance requirements, and other risk management measures.
Consistency and fairness
This ensures that all employees are treated fairly and consistently when it comes to travel arrangements and expense reimbursement. This can help prevent misunderstandings and disputes between employees and management.
Improved employee experience
A well-designed business travel policy can help improve the overall employee experience by providing clear guidelines and resources for travel planning and booking. This can help reduce stress and uncertainty for employees who are required to travel for business.
A travel policy plays an important role in the negotiation and enforcement of preferred rates. For companies that have large volumes of business travel, it becomes integral to book with a specific vendor in order to secure discounts or useful add-ons for their business travel. When the rates are negotiated, it becomes crucial for business travelers to use these vendors; in this way, the company will begin to realize savings. The business travel policy will communicate to your employees what is expected of them concerning travel. Based on the amount spent with a specific vendor, better rates may be offered.
It states specifications for meals, tips, entertainment, alcohol consumption, and much more to provide concrete guidelines for expenses and expense reporting. The expense tool helps travelers manage receipts, therefore, making expense reporting more efficient. The use of such tools can save time for both the traveler and the accounting department, providing itemized reports in a clear, concise manner.
It can be challenging for corporations to keep track of the comings and goings of all their employees when they’re frequent travelers, including the expenses. With business travel being the second biggest controllable expense on the company accounts, a well-laid and updated travel policy helps control costs, set clear expectations, mandate tool usage, and much more. A business travel policy is intended to help a company manage travel costs, ensure compliance with laws and regulations, manage travel risks, promote fairness and consistency, and improve the employee travel experience.
As is important to have a comprehensive business travel policy its implementation is equally crucial for its success. Corporate travel management platforms like Paxes enhance an accessible and visible platform with the help of mobile application Setting up rules, authorities, and expenditure limits will reduce deviations. Further, TMCS assists companies with developing policies based on the company’s unique culture, travel behaviors, negotiated rates, and policies. The business travel policies should sound simple and friendly for better acceptability. And if the TMC is well-versed with the travel policy they can offer better assistance.