Do any of your employees travel for work? If they do (or might in the near future), keep reading. Today, we’re going to talk a little bit about your travel expense policy.
What is a Travel Expense Policy?
Your travel expense policy outlines what expenses you’ll reimburse if an employee travels for company business. Travel in this case usually means an overnight trip, but you can also include information about expenses if an employee is traveling to another city for the day or driving around town visiting clients .
The policy also tells your employees what documentation needs to be submitted to get their reimbursement quickly. Don’t forget, you need the documentation to make sure the business can deduct the expenses from your taxes.
9 Things to Include in a Travel Expense Policy
It’s up to you whether you include your travel expense policy as part of your expense policy, or if you have a standalone document for it. Either way, you might want to consider including the following in it:
the name of the person who authorizes travel
the name of the person who approves expenses
how to separate costs if the employee will be vacationing some on the business trip
what expenses will be prepaid by the company (like airfare, rental vehicles, conference fees, etc.)
what expenses will be reimbursed with proper documentation (like airfare, rental cars, usage of personal cars, lodging, meals, parking, tolls, etc.)
any expenses that will not be reimbursed
how the employee should handle travel costs for a friend or family member accompanying them
what the per diem will be for meals, etc.
what documentation the employee must submit for reimbursement
When you’re writing your policy, make sure that it’s strict enough that your employees aren’t confused, but leave some room for flexibility. For example, if an employee is traveling somewhere with a higher cost of living, you might consider increasing their per diem.
You also want your policy to be easy to read and understand so your employees can follow it without any problems.
Why Do I Need a Travel Expense Policy?
Travel expense policies help you control travel costs a little bit. Because you’ve set out rules and expectations, your employees will know that they can’t stay in a 5-star hotel and order room service every night. But, they’ll also rest easy knowing that you’re not going to make them stay in a dingy, super cheap hotel.
It also helps you be better prepared for the expenses. Because you named someone to authorize travel plans in your expense policy, you won’t be surprised when someone hands you their hotel bill.