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What are the essential components of a corporate travel policy?

As the world opens back up from COVID19-era lockdowns, firms that got their start in 2020 — or grew significantly during that period—  are beginning to realize that business travel is still a key component of corporate expenditures. Whether it's bringing remote hires in for on-site workshops, convention-going or sales trips, almost every business will need to pay for their employees or founders to go somewhere. Without a corporate travel policy in place, that process can become a bloated, ambiguous source of expenses.

A good corporate travel policy not only governs how travel expenses are approved, paid for or reimbursed, but also what can be expected during those trips. Employees are far more comfortable when your policy outlines exactly what the company pays for, how much you'll pay and what, if anything, comes from their own pocket.

Fortunately, a corporate travel policy doesn't have to rival a travel guidebook in length. For most businesses, especially startups, your policy can comfortably fit on one or two pages. Here are the essentials you'll need to include.

A "Relative" Expense Guideline

Cost of travel can fluctuate drastically from place to place and even week to week. Rather than trying to set a standard budget for every trip, attach a trip's travel expense limits to a dollar range based on equivalent flights and/or lodging as demonstrated by market aggregators (e.g., Google Flights, Kayak, et cetera). This ensures your employees can conveniently plan travel and that managers have an objective baseline for approval.

Outline Meal Policies

Avoid the hassle and confusion of reimbursement by either stating that all meals during business functions are paid for by the company or by the company's providing a per diem. If employees wish to dine beyond either of these provisions, it'll be clear that this will be on personal funds.

Per diems vary from region to region, but $50 is considered a good starting place for most domestic cities. If you're visiting a more expensive local, like the San Francisco Bay Area or New York City, you may want to allot more.

Have A Clear Expense Policy

Travel often means the unexpected, and it's likely you'll not be able to provide for all reasonable expenses over the course of a business trip. From Uber rides to last-minute print jobs, business trips are full of purchases that your employees will need to make either on a company card or with their own funds with the expectation of reimbursement. Your travel policy is not the place to outline how these expenses are to be reported and reimbursed.

Instead, provide an expense reporting policy that outlines how employees handle expenses that aren't pre-authorized, how to request reimbursement as well as what constitutes expenses that qualify for reimbursement. Your travel policy can address travel-specific items, like ridesharing receipts, but leave the rest of the heavy lifting for your expense policy to keep the travel policy simple and straightforward.

We talk more about good receipt hygiene (and give you a free expense reporting policy template!) here.

Versatility is Better Than Granularity

It may be tempting to try and craft a corporate travel policy that accounts for every possible situation — but the resulting complexity is confusing to employees and frustrating to managers. A good corporate policy provides tangible guidelines and incentivizes employees to defer to management for expenses they're unsure about, reducing waste as well as misunderstanding.

If you don't already have one you like, we've created a versatile, ready-to-go corporate travel policy here that you can either use as-is or modify for your firm's unique circumstances.

DOWNLOAD THE PAPERCLIP CORPORATE TRAVEL POLICY



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What are the essential components of a corporate travel policy?

As the world opens back up from COVID19-era lockdowns, firms that got their start in 2020 — or grew significantly during that period—  are beginning to realize that business travel is still a key component of corporate expenditures. Whether it's bringing remote hires in for on-site workshops, convention-going or sales trips, almost every business will need to pay for their employees or founders to go somewhere. Without a corporate travel policy in place, that process can become a bloated, ambiguous source of expenses.

A good corporate travel policy not only governs how travel expenses are approved, paid for or reimbursed, but also what can be expected during those trips. Employees are far more comfortable when your policy outlines exactly what the company pays for, how much you'll pay and what, if anything, comes from their own pocket.

Fortunately, a corporate travel policy doesn't have to rival a travel guidebook in length. For most businesses, especially startups, your policy can comfortably fit on one or two pages. Here are the essentials you'll need to include.

A "Relative" Expense Guideline

Cost of travel can fluctuate drastically from place to place and even week to week. Rather than trying to set a standard budget for every trip, attach a trip's travel expense limits to a dollar range based on equivalent flights and/or lodging as demonstrated by market aggregators (e.g., Google Flights, Kayak, et cetera). This ensures your employees can conveniently plan travel and that managers have an objective baseline for approval.

Outline Meal Policies

Avoid the hassle and confusion of reimbursement by either stating that all meals during business functions are paid for by the company or by the company's providing a per diem. If employees wish to dine beyond either of these provisions, it'll be clear that this will be on personal funds.

Per diems vary from region to region, but $50 is considered a good starting place for most domestic cities. If you're visiting a more expensive local, like the San Francisco Bay Area or New York City, you may want to allot more.

Have A Clear Expense Policy

Travel often means the unexpected, and it's likely you'll not be able to provide for all reasonable expenses over the course of a business trip. From Uber rides to last-minute print jobs, business trips are full of purchases that your employees will need to make either on a company card or with their own funds with the expectation of reimbursement. Your travel policy is not the place to outline how these expenses are to be reported and reimbursed.

Instead, provide an expense reporting policy that outlines how employees handle expenses that aren't pre-authorized, how to request reimbursement as well as what constitutes expenses that qualify for reimbursement. Your travel policy can address travel-specific items, like ridesharing receipts, but leave the rest of the heavy lifting for your expense policy to keep the travel policy simple and straightforward.

We talk more about good receipt hygiene (and give you a free expense reporting policy template!) here.

Versatility is Better Than Granularity

It may be tempting to try and craft a corporate travel policy that accounts for every possible situation — but the resulting complexity is confusing to employees and frustrating to managers. A good corporate policy provides tangible guidelines and incentivizes employees to defer to management for expenses they're unsure about, reducing waste as well as misunderstanding.

If you don't already have one you like, we've created a versatile, ready-to-go corporate travel policy here that you can either use as-is or modify for your firm's unique circumstances.

DOWNLOAD THE PAPERCLIP CORPORATE TRAVEL POLICY



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