Have you ever been asked to write a travel and expense policy for your company? If the answer is yes, then you know how difficult it can be to create one that’s both effective and easy to use for everyone involved. When it comes to your business’s travel and expense policy, you’re in charge of making sure the process is effective and efficient. Without the right policy in place, your employees can waste valuable time submitting receipts and collecting reimbursement that they shouldn’t have to in the first place. While the exact details of your policy will vary from business to business, there are several general travel and expense policy best practices that can help ensure you create the best policy for your company.
Travel and Expense Policy Best Practices
When you look for best practices and guidelines for writing your travel and expense policy, you’ll hear a few common refrains: just keep it simple, talk with your employees, make sure you’re streamlining travel and expense management. While all of these are great bits of advice, they aren’t very substantive. We wanted to provide you with something a bit more concrete, so below, we’ve identified three travel and expense policy best practices you can repeat as a mantra as you write and update your policy.
1) Let the Policy Say “No” For You!
Your travel and expense policy is one of the most important documents in your company. It’s a tool that helps you control costs, avoid fraud and ensure compliance with government regulations. But it also serves a second purpose: It protects you from liability. And while it may seem like an inconvenience to employees, it can actually save you money and headaches down the road. That’s why utilizing the travel and expense policy best practices during its creation is so important.
If you’re one of those companies that has no policy or has a very permissive one, then you’re probably spending a lot of time reconciling expenses and answering employees’ questions about what they can or cannot do. That takes away from your time on other important tasks. The best way to manage travel and expense policies is to have clear guidelines — whether they come in the form of hard-and-fast rules or general guidelines that allow employees some flexibility based on experience and risk tolerance.
2) Fraud Doesn’t Have to Be Inevitable
A study by the Association of Certified Fraud Examiners found that companies will experience fraud in the range of 7% to 10% of total expense claims. That means more than one out of every 10 transactions is fraudulent. But this isn’t just about fraud – it’s about wasted money and lost productivity too. Even if you have security measures in place, employees will still be tempted to try to get away with fraud.
While that doesn’t mean you should accept fraud as inevitable, it does mean one of the most important travel and expense policy best practices is to be prepared for it. By implementing controls in your policy to deter theft, you can significantly reduce fraud. Potential controls may include:
- Documenting actual mileage driven when taking a car on a business trip.
- Requiring receipts to support employee travel expenses.
- Requiring receipts when gift cards are purchased or reimbursed.
You may be thinking that no matter how many precautions you take, some employees will still try to game the system. While that may be true, the goal here is to remember that fraud should not be treated as an inevitability. You should continue to consider which internal controls will be most helpful, how you can encourage other employees to report suspected fraud and where vulnerabilities may still exist in your travel and expense management processes.
3) Recognize the Value of Data
A travel and expense policy is an important part of a company’s operations. It helps employees understand the rules, who’s allowed to make decisions and why, and how they can get reimbursed for their work. But what if you could take your travel and expense policy one step further? What if it could actually help you improve your company’s travel and expense policies?
That’s where data comes in. If you want to see the impact of your company’s travel and expense policy, you need the right data in your system. That means ensuring your travel and expense policy is integrated into all parts of your purchasing system. By doing this, you will be able to gather data across all spending and provide better trends analysis across all types of business expenses.
Another critical component of a successful travel and expense policy is being able to connect the dots between spending against pre-approved budgets. However, that can be difficult to manage if you utilize traditional methods of expense reporting. That’s why it’s so important to get the right tools in place in order to gain real-time visibility over your expenses and make decisions based on that data.
The Best Best Practice? Automating Expense Management With CompanyMileage
The best travel and expense management systems are the ones that can help you keep track of your spending, control costs, and make data-driven decisions. They’re also the ones that let you do this in a way that’s easy to use and actually works for your business and its employees.
At CompanyMileage, we understand how important it is to have the right tools for managing travel expenses, so we created SureMileage, SureExpense and our mobile app, SureMobile. With these solutions, we approach travel and expense reimbursement in a novel way. Rather than verifying the miles that were driven, SureMileage calculates the expenses to be reimbursed. Employees simply report their starting point and destination and the system calculates the driving distance between them. No manually recording odometer readings, and no padded mileage estimates.
With helpful features such as one-touch check-ins at each service location, the ability to flag certain behaviors in the system, and integrations with all major payroll and accounting systems, we’re confident our solution has everything you need to streamline travel and expense management. If you want to learn more about how CompanyMileage can help your company be more efficient, contact us today!