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If you’re a business owner, you know that company expenses can quickly spiral out of control. One of the biggest culprits? Employee travel. It’s important to have a clear travel and expense policy in place to ensure transparency and accountability. Here’s a sample policy to help get you started.
What Is a Travel and Expense Policy?
A travel and expense policy is a set of guidelines that outlines how employees should handle expenses related to business travel. A good travel and expense policy should include guidelines for booking travel, types of expenses that are reimbursable, and the process for submitting expense reports.
Why Is a Travel and Expense Policy Important?
A well-written travel and expense policy can help your company in several ways:
- Streamline the expense reimbursement process
- Ensure compliance with tax laws and regulations
- Reduce the risk of fraud and misuse of company funds
- Help employees understand what expenses are reimbursable
Now that you understand the importance of having a travel and expense policy, let’s take a closer look at what should be included in it.
General Guidelines
Start your policy off with some general guidelines that outline the purpose and scope of the policy. This section should include:
- The purpose of the policy
- Who the policy applies to
- Exceptions (if any)
For example:
The purpose of this policy is to establish guidelines for employees who travel on company business. This policy applies to all employees who travel on behalf of the company, including full-time, part-time, and contract workers. Exceptions to this policy must be approved by the employee’s supervisor and the company’s finance department.
Booking Travel
Next, your policy should outline how employees are expected to book their travel. This section should include:
- The booking procedure
- What types of travel are approved
- How far in advance travel should be booked
For example:
All travel must be booked through the company’s preferred travel agency. This includes airfare, rental cars, and hotel accommodations. Travelers are expected to book economy class airfare for domestic and international travel. Business or first-class travel may be approved in exceptional circumstances. All travel must be booked at least two weeks in advance, unless there are extenuating circumstances.
Reimbursable Expenses
The heart of your travel and expense policy is the section that outlines what expenses are reimbursable. This section should be as detailed as possible to help employees understand what expenses they can and cannot submit for reimbursement. This section should include:
- What types of expenses are reimbursable
- Any limits on expenses (such as daily meal allowances)
- What documentation is required for reimbursement
- How and when expenses should be submitted for reimbursement
For example:
Employees are eligible for reimbursement of reasonable and necessary expenses incurred while traveling on company business. Reimbursable expenses may include airfare, lodging, meals, transportation (including taxis, buses, and rental cars), and incidentals (such as tips, laundry, and phone calls). Daily meal allowances are limited to $50 per day for domestic travel and $75 per day for international travel. All expenses must be supported by original receipts and submitted within two weeks of the end of the trip.
Non-Reimbursable Expenses
It’s just as important to outline what expenses are not reimbursable. This section should be clear and concise to avoid confusion. This section should include:
- What types of expenses are not reimbursable
- Any exceptions to the rule
For example:
The following expenses are not reimbursable:
- Personal grooming items (such as haircuts or manicures)
- Entertainment expenses not related to business meetings
- Expenses incurred by family members or friends
Conclusion
A well-written travel and expense policy can help your company save money and reduce the risk of fraud and misuse of company funds. Use this sample policy as a starting point to create your own policy that is tailored to your company’s specific needs.
FAQ
| Q: Do I need a travel and expense policy? | A: Yes! A travel and expense policy can help you save money and ensure transparency in your employee’s travels. |
| Q: Can I make exceptions to the policy? | A: Yes, but exceptions must be approved by the employee’s supervisor and the company’s finance department. |
| Q: What expenses are reimbursable? | A: Reimbursable expenses may include airfare, lodging, meals, transportation (including taxis, buses, and rental cars), and incidentals (such as tips, laundry, and phone calls). |
| Q: What types of expenses are not reimbursable? | A: Non-reimbursable expenses may include personal grooming items (such as haircuts or manicures), entertainment expenses not related to business meetings, and expenses incurred by family members or friends. |