How to write a corporate travel policy? Best practices and benefits

Published

Aug 23, 2024

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Business travel is essential for many industries and organizations. But without clear plans and policies in place, it can quickly become a logistical and financial headache. A corporate travel policy isn’t just a set of rules—it’s a strategic tool to help companies manage their travel expenses, keep travelers safe, and operate efficiently. In a world where every dollar counts and employee satisfaction is key, a travel policy isn’t a nice-to-have. It’s a must.

This article will explore why you need a corporate travel policy and what they can bring to the table. Then, we’ll guide you through the process of creating a business travel policy that aligns with your organization’s overall goals while also addressing your employees’ needs when they’re on the road.

Whether you're setting up a travel policy from scratch or looking to refine one that already exists, you’ll find practical steps and best practices ahead—along with insights on how Rippling can automate and streamline the expense management side of business travel.

What is a corporate travel policy?

A corporate travel policy is a set of guidelines that governs how employees should plan, book, and conduct business travel on behalf of their organization. It provides a framework to help make sure all travel-related activities align with the company’s goals, budget, and compliance requirements. The policy should also outline the company’s expectations for business travelers when they take company-sponsored trips, including travel expenses that are allowed, any preferred vendors, and procedures for getting expense approval and reimbursement.

By establishing a clear and comprehensive travel policy for employees, companies can set expectations, streamline their travel processes, control costs, and reduce the risk of miscommunication or policy violations. The policy then serves as a reference point for employees to make informed decisions while on business trips so their actions remain consistent with the organization’s standards.

Lastly, a well-defined policy should help keep travelers safe by addressing safety protocols and emergency procedures.

10 elements of corporate travel policies

Here are some key elements that are commonly included in a business travel policy:

Approval processes for corporate travel: Established steps and what authorizations are required before employees book travel arrangements.
Hotel, car, and airline reservations: Guidelines on how travelers select accommodations, transportation, and flights, including any preferred vendors or booking platforms.
Taxi and ride-sharing use: Policies on how employees should use taxis, ride-sharing services, and other local ground transportation options during business trips.
Meal fees: Daily meal allowances or per diem rates for food and beverages for travelers during business trips, along with reimbursement procedures if employees pay out-of-pocket for covered expenses during business travel.
Medical care and travel insurance: Instructions on how travelers can obtain necessary medical care, coverage details, and the process for claiming travel insurance in case of emergencies during business trips.
Exchange fees: Policies on how travelers should handle currency exchange fees and how they should be documented and reimbursed during business trips.
Reimbursement processes: Detail on how employees should submit expense reports, including the documentation required for reimbursement of travel expenses.
Travel risk management: Protocols for assessing and managing risks related to travel, such as travel advisories, health concerns, and emergency evacuation procedures.
Compliance with local and international laws: Guidelines to ensure that employees adhere to relevant laws and regulations when traveling domestically or internationally for business trips.

When you’re setting out to write a corporate travel policy, it can seem daunting at first. But there are many great resources that can help—including travel policy templates. We’ve put together a step-by-step how-to guide and best practices below.

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How to write a corporate travel policy

Creating a corporate travel policy is a strategic process that requires careful consideration of both business objectives and employee needs. Below is a step-by-step guide on how to write a travel policy. This will help finance teams and business owners develop policies that align with their organizational goals and create smooth, efficient travel experiences for their employees.

1. Define your business objectives

The first step is to define your goals and objectives. Determine what your organization aims to achieve with its travel policy, whether it's:

Controlling costs during business travel
Keeping employees safer on business trips
Complying with legal and regulatory requirements

Knowing and understanding your business objectives will guide the development of your travel policy and help make sure it supports the company’s overall strategy. For example, if cost control is your main priority, you might write a policy with specific guidelines for choosing cost-effective airlines and flights, hotel bookings, and transportation options.

2. Understand your employees' needs

To create a policy that’s both effective and practical, it’s necessary to understand the needs of your employees as they relate to business travel.

Consider the nature of their work, how frequently they travel, and the destinations they typically visit for business purposes. Conduct surveys or interview employees and other stakeholders to gather insights into their travel challenges, preferences, and expectations. This will help you write a policy that is not only aligned with your business goals but also takes into account the realities of your employees' travel experiences, which can result in higher employee satisfaction and compliance.

3. Define needed permissions according to the jurisdiction

Business travel often involves crossing state or national borders—and these can each come with legal and regulatory requirements. Your corporate travel policy should include guidelines for getting the right permissions and documentation for different types of travel, whether domestic or international. These might include:

Visa requirements
Work permits
Special licenses
Special considerations related to health and safety, like vaccinations or travel insurance

Clarifying these requirements in your policy can help head off potential compliance issues and help ensure seamless business travel. This part of the policy can also improve your organization's duty of care to keep travelers safe on business trips.

4. Draft a detailed and clear policy

With your objectives, employee needs, and necessary permissions defined, the next step is to draft the actual travel policy.

The policy should be detailed and clear, covering all aspects of business travel from start to finish. Include guidelines for:

Booking travel. Include your policies and procedures for how employees and managers should book flights, hotels, car rentals, and ground transportation. Outline your policies for booking economy class versus other types of airfare for business travel.
Preferred vendors. If your business has any preferred vendors (like specific airlines, hotel chains, travel agents, or booking platforms), specify which and how travelers should use them for business trips.
Travel budgets and expenses. Address typical expenses travelers might incur, such as meals, entertainment, and incidentals. Set clear expense limits and outline the policies and procedures for business expense reimbursement during or after trips. Include any documentation you require for reimbursing travelers’ out-of-pocket expenses (i.e. receipts or expense reports).
Emergencies. The policy should also cover procedures for handling emergencies, cancellations, and changes to travel plans.

Keep in mind that this list isn’t comprehensive—your business travel policy should include any other elements that make sense based on your organization’s goals, needs, and travel practices. The goal is to create a comprehensive document that leaves little room for ambiguity, so employees know exactly what is expected of them.

Once your draft policy is complete, review it thoroughly. Include other managers and stakeholders in the review process. Solicit feedback on your travel policy example to make sure the policy is complete and comprehensive.

5. Communicate the travel policy

With a finalized corporate travel policy documented and in hand, it’s time to communicate it to all your employees. This involves more than just sending an email. Consider hosting training sessions or workshops to walk all managers and employees through the policy and answer any questions they might have.

Make the policy easily accessible, whether through the company intranet, an organizational database, your employee handbook, or all of the above. It’s also important to cover the travel policy during onboarding for new hires, to make sure they are familiar with the guidelines from the start.

Effective communication helps ensure employees understand and follow the policy, reducing the risk of noncompliance.

6. Review and update the travel policy regularly

A corporate travel policy is not a static document; it should evolve with your business and changes to the travel landscape.

Regularly review and update your policy to reflect changes in your company’s goals, travel budget, industry standards, and legal requirements. And as they complete trips under the new policy, solicit feedback from employees and managers to identify areas that may need to be adjusted to work better in the real world. For example, perhaps a hotel budget cap is too low for employees to find hotels in a certain city. Feedback will help surface this issue and allow you to make a change.

7. Monitor compliance and provide support

Finally, establish mechanisms to monitor compliance with the travel policy and provide ongoing support to employees.

Use expense management tools to automate receipt and expense report tracking, monitor adherence to the policy, and identify any patterns of noncompliance. Offer resources like a helpdesk or a dedicated travel coordinator to assist employees with booking travel or answering any questions related to their business trips. Going the extra mile and providing support can help employees feel more confident in following the policy, giving it a better chance of success.

Why do you need a corporate travel policy? 4 benefits

A well-written corporate travel policy should benefit both employers and employees by helping them manage their business travel and expenses efficiently and effectively. Below are some of the key benefits that highlight why it’s worth taking the time to develop a comprehensive policy.

Keeping employees safe and secure

One of the biggest benefits of a corporate travel policy is the ability to improve duty of care to keep employees safe and secure while they are on the road.

Your policy can (and should) include guidelines on things like choosing safe hotels and other accommodations, using trusted transportation services, and following specific protocols in case of emergencies. It can also outline the steps employees should take to protect their personal information when booking travel and during trips. These types of measures can help employers keep business travelers safe to the extent that they are able.

Improving expense tracking and reporting

From airfare to hotels, car rentals, meals, entertainment, and even leisure activities, business travelers can rack up a lot of expenses during trips. One of the biggest benefits of a corporate travel policy is the role it plays in managing expenses, from tracking and reporting to reimbursing costs for travelers.

By standardizing the process for booking flights, hotels, and other elements of business trips—as well as creating procedures for submitting expenses—companies can gain better visibility into travel costs. This allows them to create more accurate budgets.

Moreover, with a consistent framework in place, it becomes easier to track and audit travel expenses, which can help reduce the likelihood of errors, fraud, or overspending. Effective expense tracking not only benefits the company’s bottom line—it also simplifies the reporting process for business travelers.

Streamlining the reimbursement processes

When your travel and expense policy clearly outlines what expenses are covered and how they should be documented, it reduces the chances of disputes and delays in reimbursement. Employees know exactly what is required of them, from keeping receipts to submitting expense reports within a specified timeframe. This helps prevent confusion and friction between employees, managers, and the finance department, leading to a smoother, more efficient reimbursement process.

With Rippling, expense management and reimbursement become fast, painless, and user–friendly thanks to powerful customization and automation. Via web or a mobile app, employees submit expenses or upload receipts. Approvals are based on rules you set up based on employees’ departments, roles, job titles, locations, and other data—and once you set them up, they automatically apply to reimbursement requests. Out-of-policy requests, duplicate transactions, or receipt mismatches get automatically flagged, and every expense gets synced to your organization’s general ledger for easy accounting.

Improving compliance and accountability

Lastly, having a corporate travel policy in place can improve compliance and accountability across the organization by establishing clear rules and expectations for business travelers and giving all employees the same standards to adhere to when on company-sponsored travel. The uniformity a policy provides can foster a culture of accountability—and employees are often more likely to follow procedures when they understand the reasons behind them and when there are consistent consequences for noncompliance. This, in turn, helps protect the company from legal and financial risks associated with travel.

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Corporate travel policy: 5 best practices

Here are some corporate travel policy best practices to consider when developing and maintaining your corporate travel policy.

Provide key resources for corporate travel

Make sure employees have access to essential resources while traveling, including necessary forms for travel requests, expense reports, and reimbursement claims. Once travel is booked, they’ll need their flight numbers, confirmation numbers, boarding passes, hotel reservations, and any other relevant forms, documents, reservations, and paperwork. Additionally, make sure that employees have access to important contact numbers, such as the company’s travel coordinator, emergency services, and your preferred travel agency, if you use one.

Equipping employees with the right resources helps them navigate travel-related challenges and makes sure they have the support they need to make their trips smooth and as stress-free as possible.

Include travel risk management

Travel risk management involves identifying potential risks associated with business travel—such as health concerns, political instability, or natural disasters—and developing strategies to mitigate them. In your travel policy, you can include guidelines on how to assess risks before a trip, as well as protocols for responding to emergencies during travel. For example:

Providing employees with travel insurance
Offering pre-travel health consultations
Having a dedicated communication channel or protocol for emergency situation during business travel

Incorporating risk management into your travel policy improves your organization’s duty of care to protect your employees and reduce the potential impact of unforeseen events on your business operations.

Be aware of employee satisfaction

While the primary goal of a corporate travel policy is to manage travel expenses and logistics, it’s also important to consider employee satisfaction. A travel policy that is overly restrictive or fails to consider employees’ comfort and well-being can lead to dissatisfaction, decreased productivity, and higher turnover rates.

Avoid this by involving employees in the policy development process. Seek their feedback, address their concerns, and consider flexible options where possible—like allowing employees to choose their preferred flights or airlines within a certain budget.

Update the travel policy regularly

The business environment and travel landscape are constantly evolving, and so should your corporate travel policy. Set a schedule for reviewing the policy, such as annually or biannually, and make adjustments based on changes in company goals, industry standards, and external factors like new travel regulations or emerging risks.

It’s also a good idea to gather feedback from employees and managers to identify specific areas you may need to revise.

Communicate the policy during onboarding

A corporate travel policy is only effective if employees are aware of and understand it. One of the best ways to communicate it to every employee is to make it part of your onboarding flow, so you can educate employees about the policy from the start.

Rippling: Easy corporate travel policies for your business

Rippling may not be able to write your corporate travel policy, but it can help streamline and automate expense management and reimbursement.

With Rippling, you can automate expenses with complete control thanks to expense reporting with real-time policy checks, seamless approvals, and direct accounting integration.

While most expense management solutions only allow for basic employee-manager approval chains, with Rippling expense management’s advanced policy engine, you can set hyper-custom policies based on the vendor, dollar amount, and expense category, helping you block out-of-policy expenses with ease. You can also tee up automated workflows that help you control spend, like triggering an alert when a department’s expenses sharply increase.

FAQs on corporate travel policies

Who handles corporate travel?

In larger organizations, there may be a dedicated travel management team responsible for coordinating all aspects of business travel, including booking flights, hotels, and transportation, as well as managing travel budgets and compliance with the travel policy. In smaller companies, these responsibilities might fall on HR personnel or office managers. Some businesses also opt to work with third-party travel agencies that specialize in corporate travel, which can provide expertise, preferred rates, and streamlined booking processes.

Is business travel 100% deductible?

In general, business travel expenses are 100% deductible, provided they are ordinary and necessary expenses incurred while conducting business away from the taxpayer’s main place of work. This includes the cost of transportation (such as flights, car rentals, and taxis), lodging, meals, and other incidental expenses related to the business trip.

However, there are some limitations and specific rules to consider. For instance, meal expenses are only 50% deductible in most cases, and the IRS requires proper documentation, such as receipts and records of the business purpose of the trip, to substantiate the deductions.

How do companies reimburse for travel expenses?

Companies typically reimburse employees for travel expenses through a process that involves submitting an expense report that includes information about the trip, such as dates, locations, and the purpose of the travel, along with receipts for all expenses incurred. The company’s travel policy will usually specify which expenses are eligible for reimbursement and any documentation requirements. Once the expense report is submitted, it is reviewed by the finance or HR department to ensure compliance with the travel policy.

Some companies use expense management software to streamline this process, allowing employees to submit expenses and track reimbursements electronically.

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This blog is based on information available to Rippling as of August 22, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.

last edited: August 23, 2024