Recently, we’ve seen how an event with far-reaching effects can significantly alter the workforce, shutting down office spaces, postponing conferences, shifting many employees to remote work and causing us all to drastically change our plans. The coronavirus, or COVID-19, is certainly one of the biggest national emergencies this country has seen in a long time, but other events can also impact your business activities such as earthquakes, weather events, shelter-in-place orders and even car accidents.
What the coronavirus pandemic has made evident to many companies is that they may not have been adequately prepared to make the quick adjustments they needed to adapt to a new working environment. Your travel and expense policy, after all, was created with a business-as-usual mindset. A pandemic was not in the details, and odds are, the next emergency won’t be either. While you can’t plan for every eventuality, by focusing on greater flexibility, you can ensure that your company is ready to respond to an unexpected situation in the future.
Your travel and expense policy is basically a guideline of dos and don’ts for your employees to follow when incurring expenses, especially when they’re traveling. Having an expense policy streamlines the purchase of anything your employees need, since they don’t have to spend time negotiating every expense. Everything has already been laid out in the policy and in your budget. What happens when unexpected situations arise, though? Your expense policy needs to be able to stand up against the things you couldn’t have known to plan for.
The Unexpected Cost of Trip Cancellations & Changes
It’s conceivable that something may come up that causes a trip to be cancelled, postponed or cut short. However, you likely didn’t consider the likelihood of all travel coming to a standstill in such a way as COVID-19 caused. Suddenly, businesses have been forced to pause their employees’ travel as much as possible for their own safety and to abide by stay-at-home ordinances. These rapid changes to plans come with a price tag, though.
Most expense claims during COVID-19 have been due to trip changes. Across industries, AppZen reports that costs associated with interruptions in travel account for over 50% of expenses.
Fees associated with cancelling flights, hotels, car rentals and other reservations are likely anticipated once in a while, but on such a massive scale, they really add up. If your company has travel insurance to help you deal with such costs, you may be surprised to discover that a public health crisis such as the coronavirus is not covered in most cases. That means the cost of cancelled plans are on the company’s dime.
The Cost of Unbudgeted Items
When emergencies occur, there’s almost always a monetary cost to mitigating their effects. During the coronavirus outbreak, that means purchasing more personal protective equipment (PPE) for employees and helping them transition their work environments. Companies in industries from healthcare to consumer goods to manufacturing with essential workers require masks, gloves, gowns or other PPE to continue to do their jobs safely. AppZen is reporting that in some instances, up to 20% of expenses are attributed to the purchase of masks.
For workers who are able to work remotely, there are costs associated with quickly setting up the work environments they need. Companies must contend with expenses such as office equipment like printers, webcams or cables and subscribing to telecom platforms that will allow meetings with team members or clients to continue.
Planning Flexibility into Your Expense Policy
Whether it’s a hurricane, snowstorm or a global pandemic, accepting that these kinds of unexpected events could happen is the first step to preparing your expense policy for unanticipated expenses. After acceptance, there are a few things you can implement to make your company more adaptable to crises.
Make it official policy to always be aware of where your employees are when they’re out in the field. Even if they’re just driving a daily route, knowing their location can be vital in an emergency. In addition, stay up-to-date on travel advisories from local authorities in these locations. If your employee may be potentially exposed to a public threat, you want to know so you can take necessary steps to keep them safe.
For employees who are uncomfortable or unable to travel, allow them the leniency to alter their work plans. In some cases, this could mean cancelling appointments or reservations or allowing them to telecommute.
It’s also wise to have a plan to track trip fees from cancellation or changes, so you’ll be aware of just how much money it costs you. Consider possible solutions for reclaiming lost funds such as postponing travel for another time or opting for a more extensive business travel insurance policy.
For Unbudgeted Purchases:
During interruptions in regular work routines such as evacuations or stay-at-home orders, your company should allow employees to be reimbursed for some unplanned expenses to help them continue to do their work. These can include subscriptions to software like Microsoft Office, equipment such as headsets or cleaning supplies and PPE. Time spent trying to get approval for expenses during an emergency will only slow down processes during a critical period. Taking the time to state clearly how unbudgeted purchases will be handled during crises will also prevent spending from getting out of hand. You may even consider enforcing a stipend during these periods.
During the coronavirus outbreak, we’ve seen everyone struggling with hardships, and that includes your employees. In order to ensure that your workers have enough money after they’ve needed to make sudden purchases on behalf of your business, it should be policy to expedite expense reimbursements during emergencies and make exceptions on what can be expensed.
As situations develop and your employees are still out in the field, you need to communicate clearly to them what your travel and expense policy dictates they should do. If their car breaks down, your policy may, for instance, allow them to call a tow truck or a taxi and have these expenses be reimbursable.
Make Your Travel & Expense Policy Stronger With CompanyMileage
Through our products, SureExpense, SureMileage and the SureMobile app we make managing travel and expenses a straightforward, fast process. For employees at all levels of your organization, our software delivers a multi-level approval process and seamless integration with your existing accounting and payroll systems.
With our powerful expense management system, streamline the reimbursement process, track expenses and generate huge savings. Request a demo with us today and start learning how CompanyMileage can work to enhance your travel and expense efforts.