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What is a T&E policy and how to properly define it?

A T&E policy is essential for the company and is an effective method of managing business travel.

For your employees, it is a document that tells them in complete transparency what is or is not reimbursed and the conditions to be respected during a trip.

The goal of a T&E policy is to manage employee travel, optimize budgets, and ensure that expenses incurred are in line with the policy.

The travel policy is not only about budgetary control. It also serves the interests of employees and guarantees them comfort and safety to leave on their travels without worrying about expenses. This is why it is important to consider opinions and needs of your employees.

So how do you write a travel policy and set firm rules while allowing employees to travel flexibly?

This article is a part of our T&E series, read our first article defining T&E here

Definition: what is a T&E policy?

A company travel policy consists of setting the rules for employee travel, laying down a precise framework for defining the budget, controlling expenses, modes of transport and accommodation, as well as internal validation processes.

In fact, the definition of a business travel policy consists in setting the rules to be respected. This also makes it possible to set up possible partnerships with suppliers to negotiate offers (transport, hotels, etc.).

The travel policy is a document of great importance which brings together all the rules set. It helps to avoid possible overruns or inappropriate expenses.

Employees travelling will therefore be aware of the framework that governs professional expenses. It is also the reference document for decision-makers such as Travel Managers, CFOs and company accountants to validate or reject an expense report and thus justify their decision to an employee.

How to define a successful travel policy?

Creating a travel policy involves a lot of organization and time to properly analyze each situation, predict various scenarios and make the right decisions.

This will allow you to establish better transparency within your team, save time through better organization and achieve considerable savings.

It is then necessary to develop the travel policy in collaboration with people who travel frequently and managers: the former can share their advice and ideas as traveling employees, while the latter are involved in the validation and the expense tracking.

Read more | 5 Main Challenges of T&E management

Here are 5 main areas to consider when defining an effective T&E policy.

Define the objectives of the travel policy

The first step is to clearly define the objectives of this policy. Optimization of travel and validation processes, cutting anomalies and unnecessary expenses, compliance with the legal framework, control of travel costs, analysis of transactions and budget control, etc.

The travel policy makes it possible to define certain rules to be observed to ensure the safety and peace of mind of employees on the move and to keep costs under control. Setting clear goals will give you a guideline, which will make it easier, but of course, you will have the option afterward to complete or adjust your policy to optimize it whenever necessary.

Once you have set these goals, you can begin to establish all the travel rules. The ideal is to collaborate with at least one employee accustomed to making business trips for the company.

Their field experience will help you find the best trade-offs between costs for the company and the needs of employees. They will also be able to identify problems and unlikely scenarios that they have encountered during their business trips.

Offer flexibility to employees

Your T&E policy lists the possible expenses in an exhaustive way and indicates the planned budget and the approaches to be taken (means of transport, location of accommodation, etc.). It should allow the employee to make the best decisions regarding their expenses, so it is a help to the employee as it is to the manager.

However, care must be taken to maintain certain flexibility and not to set up rules that are too strict. It is recommended to give employees a certain amount of freedom and to provide them with several choices.

For example, set rules on the choice of accommodation, the maximum rate not to be exceeded, without forcing the employee to go to a specific establishment.

It is possible to enter into an agreement with a hotel chain, in which case it is possible to show some flexibility for the rest of the possible expenses within this framework, such as the services included, the choice of room or the consumption of meals on the spot or elsewhere.

The same goes for transport, it is possible to set a budget and a date, then let the employee choose the departure time or the most practical mode of transport while respecting the allocated budget.

Set rules in line with the environment

Make a complete analysis of the situation: how often are the trips? What are the most common destinations? The most efficient modes of transportation to get there? How about the real needs of your employees in the field to carry out their missions?

Your travel policy must be based on the reality of the field and the concrete needs of your company, otherwise, the objectives set may not correspond to the expectations of your employees on a mission.

In this case, the ideal solution is to call on at least one employee concerned with business travel in your reflection and drafting phase. The latter will be of precious help to you in identifying the problems of nomadic teams. They will generate ideas and practical solutions to optimize the daily life of employees in the field.

Use appropriate tools

New technologies make it possible to considerably optimize the daily life of travellers and managers. From a certain number of employees, it is in a company’s interest to adopt an innovative management tool. An intelligent business travel management solution centralizes and automates business travel tasks while ensuring compliance with the company’s travel policy in place.

These solutions help you better manage business expenses, they give you more control over current or future expenses, and ultimately help you reduce business travel costs.

Available in the form of an intuitive mobile application and a Web platform, the Expensya solution perfectly meets the needs of travelling employees as well as the expectations of management teams.

Automating and centralizing tasks and data to simplify business travel: this is the problem that Expensya solves. With its expense management solution, Expensya also revolutionizes the management of expense reports a time-consuming and very complicated process. From a smartphone photo, receipts are scanned, analyzed and sent for validation. An unprecedented gain in freedom and productivity for travellers as well as managers.

Define a clear budget

It is about setting a clear and adequate budget for each expense. The budget varies depending on the duration of the business trip, the destination and the category of the expense.

It is advisable to consult the expenses already incurred and the trips made by your teams to have an exact assessment of the travel costs and analyze the different situations to define a coherent budget.

When defining the budget, it is necessary to take into account both frequent and predictable expenses (accommodation, transport, meal costs, etc.) and predict the various plausible expenditure scenarios for which it is advisable to devote a framework to better guide the employee in the field and avoid misunderstandings.

Read more | 5 Costs of T&E Expense Reporting

Communicate your T&E policy

This document is not only a guideline for decision-makers such as CFOs or company travel managers. It is also a reference document that guides employees and sets out the company’s T&E policy. This document must be known and easily accessible in order to be able to consult it if necessary.

It is also recommended to organize training and presentation sessions to properly disseminate information internally and discover employees’ questions about the rules in place. Finally, each update must also be communicated to ensure proper integration.

Travel policy: a basis for digitizing expense report management

The travel policy allows you to clearly define who is traveling, when, under what conditions and for what amount. More than a framework, it is a source of valuable information to help you better manage business expenses.

Because it clarifies the validation process from purchase request to reimbursement, the travel policy provides a holistic view of how internal business travel works. You know who is doing what, at what stage and when.

It is, therefore, preferable to seize this opportunity to digitize the management of expense reports, especially since automation has a favorable impact on employees on the operational level: time-saving, elimination of data entry, simplicity of processing, and management of expenses as they arise.

Digitizing expense report management is also an effective way to optimize the tracking of your company’s travel and expenses.

Centralizing data on a single platform allows you to collect enough data and better analyze your employees’ expenses. This practical tool will prove to be an asset in limiting errors and ensuring expenditure compliance.

The implementation of a business travel policy provides a clear and practical basis for supervising all business travel. By following these tips, you will optimize all stages of expense management and travel in general: better organization, satisfied employees, better control, cost reduction, and time savings!

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Expensya Barometer Report

Learn about the trends in the “what” and “how” of employee spend, pulled from actual expense management data, in the annual Expensya barometer report.

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