Docstoc

Travel Policy Helpful_Hints

Document Sample
Travel Policy Helpful_Hints Powered By Docstoc
					Travel Policy -
Helpful Hints Guide
                                                                                  [CLIEN NAME] | Page i


Table of Contents
General Policy Issues ................................................................................................................................................. 1
   Policy Format/Single Document ............................................................................................................................................... 1
   Current Issuance/Revision Date ............................................................................................................................................... 1
   Distribution/Communication ..................................................................................................................................................... 1
   Length Of Document ................................................................................................................................................................ 2
   Senior Management Support ................................................................................................................................................... 2
   Purpose / Scope / Responsibility .............................................................................................................................................. 2
   Corporate Guidelines and Business Unit Policies .................................................................................................................... 2
   Policy Language ....................................................................................................................................................................... 3
   Contact ..................................................................................................................................................................................... 3

Travel Authorization .................................................................................................................................................... 4
   Pre-Trip Approval ..................................................................................................................................................................... 4

Alternatives to Travel .................................................................................................................................................. 5
   Virtual Interactive Meetings ...................................................................................................................................................... 5

Consultants and Contractors ...................................................................................................................................... 6

Travel Arrangements .................................................................................................................................................. 7
   Designated Agency .................................................................................................................................................................. 7
   Making Reservations ................................................................................................................................................................ 7
   Emergency Service / Changes While Travelling....................................................................................................................... 7
   Online Trip Booking Tool .......................................................................................................................................................... 8
   Booking Through Non-Company Websites (Air / Hotel / Car / Rail) ......................................................................................... 8
   Traveller Profiles ...................................................................................................................................................................... 8
   Passports & Visas .................................................................................................................................................................... 9
   Other Travel Arrangement Topics To Consider ........................................................................................................................ 9

Risk Management During Travel .............................................................................................................................. 10
   Employees Travelling Together .............................................................................................................................................. 10
   International Travel Advisories ............................................................................................................................................... 10
   Health Precautions/Immunizations ......................................................................................................................................... 10
   General Travel Safety Tips ..................................................................................................................................................... 10
   Illness During Travel............................................................................................................................................................... 10
   Emergency Travel Assistance ................................................................................................................................................ 10

Air Travel .................................................................................................................................................................. 11
   Class of Service ..................................................................................................................................................................... 11
   Preferred Airlines.................................................................................................................................................................... 11
   Exceptions / Upgrades ........................................................................................................................................................... 11
   Lowest Logical Airfare ............................................................................................................................................................ 11
   Ticket Delivery & Cancellations .............................................................................................................................................. 12
   Electronic Tickets (e-tickets) .................................................................................................................................................. 12
   Booking Web Fares Through The Internet ............................................................................................................................. 12
   Frequent Flyer Programs ....................................................................................................................................................... 12
                                                                                   [CLIEN NAME] | Page ii

   Denied Boarding Compensation ............................................................................................................................................ 13
   Overnight Delays .................................................................................................................................................................... 13
   Staff Risk Management .......................................................................................................................................................... 13
   Charter & Private Aircraft ....................................................................................................................................................... 13

Lodging ..................................................................................................................................................................... 14
   Preferred Hotels ..................................................................................................................................................................... 14
   Spending Guidelines .............................................................................................................................................................. 14
   Suites & Executive Floors / Upgrades .................................................................................................................................... 14
   Cancellations Procedures ...................................................................................................................................................... 14
   Private Accommodation In Lieu of Lodging ............................................................................................................................ 15

Car Rental ................................................................................................................................................................. 16
   Preferred Car Agency............................................................................................................................................................. 16
   Car Rental Criteria.................................................................................................................................................................. 16
   Returning Car rental / Refuelling ............................................................................................................................................ 16
   Accidents ................................................................................................................................................................................ 16
   Car Rental Insurance – Domestic / International .................................................................................................................... 16

Alternate Transportation ........................................................................................................................................... 18
   Personal Car .......................................................................................................................................................................... 18
   Rail ......................................................................................................................................................................................... 18
   Taxi/Limousine ....................................................................................................................................................................... 18
   Ground Transportation To/From Terminals ............................................................................................................................ 18
   Company Owned/Leased Cars .............................................................................................................................................. 18

Executive Travel ....................................................................................................................................................... 20

Spouse Accompaniment During Business Travel .................................................................................................... 21

Personal/Vacation Travel ......................................................................................................................................... 22

Meals & Entertainment ............................................................................................................................................. 23
   Definitions .............................................................................................................................................................................. 23
   Spending Guidelines .............................................................................................................................................................. 23
   Alcoholic Beverages ............................................................................................................................................................... 23
   Employees Dining Together ................................................................................................................................................... 23

Tipping and Gratuities............................................................................................................................................... 24

Travel-Related Telecom ........................................................................................................................................... 25
   Wireless (Cellular / PCS) Phones / Air Phones / Calling Cards/Remote Computer Access ................................................... 25
   Air / Rail Telephones .............................................................................................................................................................. 25
   Car Telephones ...................................................................................................................................................................... 25
   Hotel Surcharges.................................................................................................................................................................... 25
   Personal Phone Calls While Travelling .................................................................................................................................. 26
   Faxes/Phone Line .................................................................................................................................................................. 26
   Cellular Phones ...................................................................................................................................................................... 26

Travel Insurance ....................................................................................................................................................... 27
                                                                                [CLIEN NAME] | Page iii

   Travel Insurance Coverage .................................................................................................................................................... 27
   Additional Travel Insurance .................................................................................................................................................... 27

Extended Stay/Temporary Assignment .................................................................................................................... 28

Miscellaneous Expenses .......................................................................................................................................... 29
   Other Reimbursable Expenses............................................................................................................................................... 29
   Non-Reimbursable Expenses ................................................................................................................................................. 29

Payment Methods ..................................................................................................................................................... 30
   Corporate Cards ..................................................................................................................................................................... 30
   Criteria For Issuance .............................................................................................................................................................. 30
   Application Instructions .......................................................................................................................................................... 30
   Card Usage ............................................................................................................................................................................ 30
     Billing And Payment Instructions ........................................................................................................................................ 31
     Other Corporate-Sponsored Card Programs ...................................................................................................................... 31
     Lost / Stolen Cards ............................................................................................................................................................. 31
     Cash Advances .................................................................................................................................................................. 31

Proper Documentation .............................................................................................................................................. 32

Expense Reporting ................................................................................................................................................... 33
   Completion & Submission ...................................................................................................................................................... 33
   Converting Foreign Currency ................................................................................................................................................. 33
   Incorrect / Incomplete Expense Claims .................................................................................................................................. 33

Travel Activity Reporting ........................................................................................................................................... 34
General Policy Issues
Policy Format/Single Document

Best Practice Recommendation: We recommend that all policies and procedures relative to Travel and
Entertainment expenses are included in the one document.

A single document emphasizes the importance senior management places on this budget item and provides an
easier reference for the traveller by eliminating inconsistencies, duplications and minimizing multiple
interpretations. A single document facilitates easier policy review, revision and distribution.

Current Issuance/Revision Date

Best Practice Recommendation: Ensure that the policy is reviewed regularly, at least once each year. This
practice helps ensure that your policy accurately reflects changes in the travel industry.

A date that appears on the title page of the policy informs readers whether the version they hold is current. The
travel industry is highly dynamic with new vendors, technologies and products continually impacting your policies
and procedures. A travel policy should reflect these changes as they occur. A current policy date underscores the
importance you place on policy by demonstrating senior management has recently reviewed the document and
publicly supports all the policies addressed.

Distribution/Communication

Best Practice Recommendation: Ensure all travellers, new employees, travel arrangers, travel expense
approvers and auditors and the designated travel agency receive a copy of the policy.

The policy should be widely distributed to travellers, travel arrangers, expense approvers, auditors and newly
hired travellers. This practice will ensure full compliance and proper monitoring of the policy. In addition, some
companies distribute the policy with a letter acknowledging receipt and intent to comply, which is signed by the
traveller and returned to management.
Length Of Document

We recommend that the main body of the policy require no more than 20 minutes reading time. Our research
indicates that reader interest starts to fall rapidly after the 20-minute mark. Attaching vendor lists or forms by way
of an appendix is a best practice that does not add unnecessary reading time, yet ensures information is available
for easy reference should your traveller need to access this information.

Senior Management Support

Best Practice Recommendation: Distribute a senior management cover letter with the policy.

Travel policy should reflect the attitudes and objectives of a company's senior management. Therefore, senior
management should participate in approving all policy decisions, and must publicly and wholeheartedly support
the travel policy.

The cover letter establishes objectives and governing principles as determined by top management (or any other
influential official of the organization) and clarifies their priorities in the travel and entertainment field (i.e. cut
costs, reduce or maintain volume of travel, increase controls). Adherence to policy can be substantially improved
when travellers recognize that senior management supports the policy and procedures in full and consistent
compliance is expected. A cover letter is especially critical where a new policy represents a significant departure
from previous practice.

Purpose / Scope / Responsibility

Clearly stating the objective of the travel policy and responsibilities of specific individuals in relation to the travel
policy is important as it sets the tone of the document and validates the reason for its existence.

Do not assume your reader has any knowledge of the document or that certain policies apply to them. The policy
should outline the principles of enforcement (e.g. expenses outside company policy will NOT be reimbursed) and
the consequences of non-compliance.

If the policy is drafted at a global or regional Head Office, it is recommended that the policy cover broad overall
policies on major expenses. It should then state that subsidiaries are permitted to make market-relevant
adjustments provided they are more, not less, restrictive than the core Policy. This allows for some flexibility on
the part of separate business units but at the same time places a cap on expenditure.

Corporate Guidelines and Business Unit Policies

Company should be commended for the compilation of one written travel policy applicable to all business units
reflecting the corporate culture and business needs. By implementing a minimally acceptable level of corporate
control, individual business units may issue their own written policies, which can be more restrictive than the
corporate guidelines, but not less so.
Policy Language

Best Practice Recommendation: It is very important for Company to replace ambiguous words and phrases with
very specific language, timeframes, and/or dollar amounts wherever possible.

Better defining terms such as “reasonable, normal standards, appropriate, or personal judgement”, can achieve
considerable savings and enhanced control. These subjective phrases can often cause confusion in that they are
open to multiple interpretations by individual employees, travel arrangers, managers, travel agents, expense
approvers, and auditors.

Contact

Best Practice Recommendation: We recommend that the travel policy provide the title (avoid providing a name
as it may fast become out of date) and contact number of the individual or department who has been designated
with ongoing responsibility for corporate travel management, or to refer any questions, complaints or suggestions.
Travel Authorization
Pre-Trip Approval

Best Practice Recommendation: A formal pre-trip approval process can be eliminated in favour of integrating
policy restrictions into a Company online booking tool, if available.

Manual pre-trip approvals can be costly, labour-intensive and inefficient when used to monitor compliance with
policy. Sharing your travel policy with your designated travel agency and integrating restrictions into an online
booking tool can be an effective and cost efficient way to monitor policy.

Our research indicates that companies with the most efficient and cost effective processes have bypassed the
pre-trip approval stage. In such cases compliance is the responsibility of the traveller and is enforced by post-trip
auditing and non-compliance consequences.

If your organization decides to keep pre-trip approval steps in place, it is recommended that a formal travel
request form be developed. The form should be a single document that requests all the travel related information
required to arrange the trip (e.g. air travel, accommodation, car rental, cash advance etc). A sample form should
be included in the Appendix and required approvals clearly stated.
Alternatives to Travel
Virtual Interactive Meetings

Best Practice Recommendation: Encourage travellers to examine low-cost travel alternatives, such as
audio/video conferencing or web casting if suitably available.

Video-conferencing is an increasingly popular alternative to travel and an opportunity to control costs. If you have
invested in web-meeting technology or video-conferencing facilities, then vendors, locations, pricing and booking
instructions should be included in this section of the travel policy.
Consultants and Contractors
Consultants and/or contractors with the Company should be referenced in the policy document and should be
subject to the same travel policies & procedures as employees unless specifically noted in the policy.
Travel Arrangements
The act of making a travel reservation is a critical moment in the business travel process because it is the point at
which the actual cost is determined. Not only is the actual cost determined at the point-of-sale, but also it is at this
stage that employees will either comply with or violate the policy.

Designated Agency

Best Practice Recommendation: This section should include your travel agents name, address, contact
information, office hours and ticket delivery instructions.

The point at which travel plans and reservations are made is fundamental to the control of Travel and
Entertainment, as this is when the actual cost of airline tickets, hotel rooms and car rentals is determined. A
designated agent can help you enforce your policy and also provide valuable management reporting to assist
Company monitor compliance to the policy.

Using one agency for all of your travel needs provides your organization with:

    •   Preferred vendor arrangements
    •   Consistent and complete Management Information Reporting
    •   Enhanced and uniform services to all travellers

Making Reservations

The policy should address the correct procedure for making air, hotel and car reservations. We recommend that
all reservations be made through your designated travel agent. This will ensure the lowest rate (either your
corporation‟s or the agency‟s) is being applied to each reservation and therefore help reduce operating costs with
little or no inconvenience to the traveller.

Emergency Service / Changes While Travelling

Best Practice Recommendation: Provide the contact information and instruct travellers to make all in-transit
changes through the designated travel agency 24-hour “800” number.

Instructing travellers to make all in-transit changes through the designated travel agency 24-hour emergency
services number ensures changes made while the trip is underway are within policy guidelines. Management
information reports will capture all updated activity, providing the company with complete and accurate travel
management data.
Online Trip Booking Tool

Best Practice Recommendation: If available, all travellers should be required to make straightforward bookings
through automated travel booking system.

Providing travellers with an easily accessible automated travel booking system ensures reservations are made
within the company‟s Travel Policy guidelines. Exceptions to this requirement will be for travel that is to take place
within 48-hours. The automated travel booking system will promote the Company‟s negotiated air, car and hotel
rates reducing lost savings on out of program bookings.

Booking Through Non-Company Websites (Air / Hotel / Car / Rail)

Best Practice Recommendation: Prohibit or highly restrict Internet booking.

Travel bookings done through non-Company Websites may exhibit the following pitfalls:

    •   Web fares displayed may not include taxes and surcharges
    •   Many fares are non-refundable and non-changeable
    •   If the flight is cancelled another airline most likely will not accept the ticket as an exchange
    •   Individuals holding web fares tickets could potentially be the first to be “bumped” in an overbooking
        situation as they are viewed a lowest fares
    •   If the flight is not taken the travellers must resolve accounting issues with the airline directly
    •   Internet fares usually require an immediate form of payment to lock in the rate
    •   There is no flexibility in routing
    •   Credit card security may be an issue if the site is not secured
    •   Traveller whereabouts cannot be verified in the case of an emergency.

Traveller Profiles

Best Practice Recommendation: Require all travellers to complete and submit traveller profiles to the designated
agency for entry into the reservations system.

Most commercial travel agencies request that travellers submit traveller profile forms. A traveller profile form
details items such as the employees‟ seating preferences, charge card numbers, airline club numbers, cost centre
information (for sorting of management information reports) and ticket delivery instructions. Requiring travellers to
complete and submit a profile to the designated agency for entry into the reservation system ensures traveller
details and preferences are readily accessible and will assist the agency in providing more accurate reports.

Travellers should be encouraged to annually update their profiles to reflect any changes in information (seat
selection, change of address or department, charge card numbers).
If applicable, a sample form and instructions for completing it should be included in the Appendix section of the
policy.

Passports & Visas

The policy should advise travellers how to obtain passports and visas. Your designated travel agency should be
able to advise you on this matter. The policy should also clearly indicate who is responsible for passport and visa
fees and charges.

Other Travel Arrangement Topics To Consider

    •   Availability of Emergency Services (American Express Global Assist, Worldwide Emergency Card
        Replacement)
    •   Electronic Mail Reservation Capabilities
    •   Special Employee Communications Booklet
Risk Management During Travel
Employees Travelling Together

Establish a policy regarding the maximum number of employees permitted to travel together on the same flight in
order to avoid the consequences in the event of an accident. Criteria used to develop this policy may include
employee rank, relationship between departments & offices, and the total acceptable number of employees
travelling together in each category. Exceptions should require approval of Senior Management and/or the Risk
Management department.

International Travel Advisories

The policy should indicate that employees must not travel to countries or regions for which a Travel Advisory has
been issued by the U.S. State Department, local governments, or company-approved Travel Agency. Providing
an online link to the appropriate warning sites on the internet is a best practice.

Health Precautions/Immunizations

Travellers should be advised to consult with medical professionals to discuss or review any immunizations that
may be required for international travel. The policy should indicate if service fees are a reimbursable expense.

General Travel Safety Tips

The policy should provide safety tips or a reference to where to obtain safety trips to minimize personal risk.
Consider tips related to personal safety, hotel safety, and airport safety. A review of "what to do in the event of"
scenarios prior to departure improves awareness of the traveler.

Illness During Travel

Employee should be provided with contact information, i.e.., immediate supervisor, 24-hour emergency travel
services number, in the event of illness during travel.

Emergency Travel Assistance

Employees should be advised to contact corporate resource, i.e.., International SOS evacuation service, or
internal corporate department which will make necessary arrangements.
Air Travel
Air travel is typically the single largest travel-related expense category representing approximately 45-50% of a
company‟s annual T&E budget. To help contain costs and exercise control, your travel policy should cover a
number of essential air topics as outlined below.

Class of Service

The key variables to be considered when determining appropriate class of travel are:

    1.   Routes
    2.   Rank
    3.   Cost

Most leading companies limit the approved class of service to economy for domestic travel and business class for
international travel exceeding six to eight hours, not including stops. First class travel may be considered when
international travel exceeds eight hours or as a perk for senior management. Any exceptions for senior
management should also be incorporated into the policy to avoid confusion over compliance to policy.

Preferred Airlines

If Company has an alliance with specific carriers a list should be included in the policy. The policy should clearly
state the regulations regarding use of the preferred airlines.

Exceptions / Upgrades

It is recommended that the policy NOT include potential exceptions to the class of service taken. These only
make it easier for employees to make unnecessary arrangements that would qualify them for first class travel.

What could be included is a statement that any exceptions to the air travel policy (class or carrier) must be
supported by written approval from senior management.

Lowest Logical Airfare

Best Practice Recommendation: In order to be effective, the travel policy should define the specific criteria that
determine Company‟s lowest logical airfare. This should be done in consultation with your designated travel
agent.

Definition: Lowest Logical Airfare is the lowest reasonable fare among flights arriving or departing within a specific
time window around the arrival/departure times requested by the traveller.
The following variables should be considered and included in order to reduce overall air costs and clarify your
organization‟s policy on selecting the lowest appropriate fare.

    •   Use of discounted or special fares (e.g. 7 day advance purchase)
    •   A specific time window (plus or minus) for departure and arrival times (e.g. one hour).
    •   A minimum saving level to be determined by management, and stated in the policy
    •   A flight which makes a stop or a connection
    •   En-route Non-Refundable fares
    •   Saturday night stay fares
    •   Off-peak flights

Ticket Delivery & Cancellations

The policy submitted for review clearly provides details concerning the delivery and cancellations of tickets.

Electronic Tickets (e-tickets)

Best Practice Recommendation: To capitalize on the cost benefits and convenience, Company should require the
use of electronic ticketing as the primary method of ticketing.

Paper tickets should be accepted for multi-leg international itineraries and airlines not yet allowing electronic
tickets. In the rare instance where paper tickets are required, delivery procedures should be described.

Booking Web Fares Through The Internet

Best Practice Recommendation: Require employees to book travel using the designated travel agency. Web
fares may be available through the agency process depending upon the region.

Booking travel reservations through Web sites should not be permitted for business travel as it provides no
visibility to the employee‟s reservation in an emergency situation, it erodes contract commitments with suppliers
impacting future negotiations, it results in missed rebates from the airlines, it is outside the current guideline of
booking all reservations through the designated travel agency, and it requires the used of personal credit or
charge card.

When reservations are booking on the Internet, any changes, cancellations, exchanges, refunds, lost tickets or
other relating to flights booked through the web will be the full responsibility of the traveller.

Frequent Flyer Programs

While establishing a strong and clear lowest logical airfare policy helps to minimize abuse due to frequent flyer
programs, the policy should also address this issue directly. Most companies with good 'lowest fare' policies and
strong exception reporting have decided to let travellers keep any benefits. The majority of companies find that
tracking and collection of these awards is not cost effective due to administrative burdens. In addition, there is the
possibility that collection of these awards may harm employee morale.

We also suggest that a caution be added to the policy to indicate that employees themselves will be fully
responsible for any Income Tax implications that may arise as a result of using employer-paid travel to earn points
for personal-use travel or rewards. Employees should be advised to seek advice from their own personal tax
advisor or specialist.

Denied Boarding Compensation

Airlines occasionally offer free tickets or cash allowances to compensate travellers for delays and inconveniences
due to overbooking, flight cancellations, changes of equipment etc. The policy should clearly state Company’s
regulations regarding acceptance of compensation and what the traveller should do with it (surrender to travel
administrator, account for it in expense report etc).

Overnight Delays

The policy should cover the acceptable course of action should travellers require overnight stays due to airline
delays. It is recommended that the policy instruct the traveller to first attempt to secure complimentary
accommodation from the airline. A contact name/number should be provided in case they are unsuccessful and
need to make own arrangements (e.g. your Travel Agency‟s After Hours / Emergency Service contact numbers).

Staff Risk Management

Best Practice Recommendation: Many companies establish a policy in this area in the event of an accident.
Criteria used to develop this policy should include:
   Management level of the employee
   Relationship between employees, departments and offices
   The total acceptable number of employees travelling together in each category

This policy should include guidelines for commercial as well as private or corporate aircraft.

Charter & Private Aircraft

Guidelines should be developed instructing travellers where (if ever) use of charter or private aircraft is
acceptable. The important variables to consider are cost, convenience, security, level of employee and
appropriate risk management concerns.
Lodging
Lodging costs account for approximately 17-20% of every dollar Company spends on T&E. To maximize cost
savings and control, clear lodging policies should be developed. Class and quality of hotel must be clearly
identified. Topics addressed to help regulate this expense category are included in this section of the report.

The objective of having a lodging policy is to consolidate your accommodation expenditure with a select group of
vendors. This will ultimately help you negotiate better rates based on the volume illustrated by comprehensive
management reporting.

Preferred Hotels

Best Practice Recommendation: Keeping in mind the impact your selection will have on employee comfort and
convenience, Company will need to select preferred hotels based on the „class‟ and „quality‟ it deems appropriate

It is important that you investigate any existing negotiated rates. Sometimes companies have negotiated good
hotel rates with preferred suppliers but travellers are not using the negotiated rates and therefore the company
not getting the benefit.

The policy should include the preferred hotel listing and any negotiated rates. This information is best distributed
with the travel policy by way of an addendum. It should also state clearly that travellers are expected to use only
the listed preferred suppliers and that exceptions need written approval from senior management.

Spending Guidelines

The policy should clarify the maximum room rates that travellers are eligible for depending on the designation /
management level. As above this list is best communicated as an addendum or appendix to the travel policy.

Suites & Executive Floors / Upgrades

Many corporations establish a policy on the use of executive floors or suites, permitting this amenity for senior
management only. If applicable this should be clearly outlined in the reviewed policy.

Cancellations Procedures

The policy should provide travellers with instructions to cancel guaranteed reservations, either by contacting the
hotel directly or the travel agency/travel department. The traveller should be advised to obtain a cancellation
number. The policy should also state that any penalties incurred for non-cancellation of guaranteed hotel
reservations will be the responsibility of the traveller and not reimbursable.
Private Accommodation In Lieu of Lodging

Best Practice Recommendation: The policy should address what (if any) claims are acceptable if the employee
chooses to stay with friends or relatives, instead of a preferred hotel.

Allows employees to expense an appropriate gift or host a meal to friends or relatives that provide overnight
accommodation in lieu of actual lodging/meal expenses that would otherwise have been incurred.
Car Rental
Although Car Rental expenses comprise a relatively small percentage of total travel and entertainment costs (4-
8% on average), significant savings can be achieved through clear guidelines. In the case of car rental being an
acceptable form of transport Company should consider the following topics:

Preferred Car Agency

Best Practice Recommendation: The policy should identify the preferred vendor(s), any negotiated rates and
corporate ID number(s). This information should also be provided to your designated travel agent.

Making travellers aware of the preferred vendor and rates will facilitate policy compliance and help control car
rental costs.

Car Rental Criteria

Best Practice Recommendation: The policy should require the use of and identify the preferred vendor(s),
negotiated rates and corporate ID number(s).

This information should be provided to the designated travel agency as well. The policy should clearly state under
what circumstances employees are permitted to use car rentals.

Returning Car rental / Refuelling

Car rental vendors routinely charge considerably more for petrol than current market prices. We recommend that
the policy encourage travellers to refuel the rental car prior to returning it to the vendor. It is important that all
travellers be aware of this simple way to substantially reduce travel expenses.

Accidents

The policy should indicate whom to contact in the case of an accident involving the rental vehicle. Travellers
should be instructed to contact the insurance adjuster (either through Company or the Corporate Card provider)
immediately after contacting the local law enforcement and the car rental agency. If bodily injury is sustained, the
employees‟ immediate manager, supervisor or company security department should be notified.

Car Rental Insurance – Domestic / International

Company has some coverage details for car rental insurance included in the policy. In many markets the
negotiated corporate rates cover the Car Rental only. Insurance still needs to be purchased separately and the
rates are usually not subject to corporate negotiation.
Most companies are adequately self-insured and therefore instruct their travellers to decline these options
domestically. In most cases, additional insurance will be required for international car rentals.

Based on the frequency of car rental, it is recommended that Company:

    1.   Establish the level of coverage under your general employee insurance plan;
    2.   Investigate cost of taking out additional coverage under this existing plan;
    3.   Compare this „blanket cover‟ cost with the cost of purchasing additional insurance at point-of-rental.
Alternate Transportation
Other forms of transportation include personal cars, rail travel, taxi, limousine, private car services, and company-
leased cars. To maximize cost savings, Company may want to consider encouraging alternative types of
transportation such as the following:

Personal Car

Company should specify under what circumstances an employee is to use a personal automobile for business
purposes. This should include rates for mileage reimbursement, insurance, receipts and logbook requirements.

Rail

If appropriate, you may want to consider establishing guidelines for rail travel. Class of service, distance and use
of rail as an alternative to air travel or car travel, should be included.

Taxi/Limousine

We recommend that the policy set guidelines for the use of taxis and corporate limousine services. Guidelines
should include the level of employee, spending guidelines, the number of employees travelling together and any
appropriate documentation.

Ground Transportation To/From Terminals

The policy should cover the acceptable means of transport to and from airport terminals. It is recommended that
travellers be instructed to share ground transportation whenever possible and that the most economical mode be
used (buses, taxis, hotel/airport courtesy services, and personal car).

Company Owned/Leased Cars

Best Practice Recommendation: If applicable, we recommend that Company provide a separate business-vehicle
policy from their T&E expense guidelines.

Most organizations choose to separate T&E expenses from operating expenses when developing policy
guidelines. The amount of information required when dealing with leased, ownership and operation of vehicles for
business purposes is highly detailed and quite complex. Tax implications also make this topic problematic and
subject to constant review and revision.

Company may wish to include these topics or detail in their business vehicle policy as follows:

    •   Function/Individual responsibilities, rules and regulations
    •   Car use/driver eligibility – use of company vehicles by non-employees or contract workers
•   Personal use guidelines
•   Insurance coverage
•   Accident and traffic violations
•   Use by non-company employees
•   Delivery/replacement of vehicles
•   Vehicle maintenance/servicing/disposal
•   Expense reporting and reimbursement
•   Tax issues (allowances, exemptions, employer-owned vehicles when used for personal driving, income
    tax)
•   Fleet safety
•   Determining lease cost options – business vehicle vs. personal vehicles
Executive Travel
It is expected that executives will use their good judgement when travelling as they do in all business related
decisions. Any exceptions for senior management should also be incorporated into the policy to avoid confusion
over compliance to policy.
Spouse Accompaniment During Business Travel
Best Practice Recommendation: Company should clearly document their policy regarding spousal / family
accompaniment for business purposes.

Issues that may be considered in this section of the policy include:

    •   Acceptable circumstances (when travelling or entertaining)
    •   Approval procedures
    •   Government taxation guidelines (taxable benefit to employee)
    •   Reporting and reimbursement
    •   Personal/family travel combined with business
Personal/Vacation Travel
Best Practice Recommendation: Company should clearly document their policy regarding Personal/Vacation
Travel.

The policy should state whether personal travel can be combined with business; usually it is permitted if there is
no additional cost to the organization and supervisor approval is obtained. The policy should outline if corporate-
negotiated rates and insurances are applicable to the personal/leisure portion of the trip. The policy should require
the employee to clearly indicate, in writing, the portion of the trip deemed "personal" for purposes of Company
liability, insurance coverage, etc.
Meals & Entertainment
Meals and entertainment costs are typically a company‟s second largest Travel and Entertainment expense, after
air travel, often accounting for 25-30% of total spending. To adequately control meal and entertainment spending,
we recommend that Company‟s policy include comprehensive guidelines in this area as follows:

Definitions

Having specific definitions in your policy will eliminate any confusion that may result when these topics are
discussed within the policy and during the expense reporting process.

Definition: Personal Meals are meal expenses incurred by the traveller when dining alone on an out-of-town
business trip.

Definition: Business Meals are meals during which a specific business discussion takes place.

Definition: Entertainment includes expenses incurred on meals or events (such as night club, theatre and
sporting events) whereby business discussion takes place with clients and/or prospects immediately before,
during or after the event.

Spending Guidelines

Establishing these guidelines will assist travellers and expense approvers in determining acceptable spending
limits and help maintain meal costs. It is important that these figures are reviewed on an annual basis to ensure
that employees are not being over paid or shortchanged in regard to these limits.

Alcoholic Beverages

Company‟s policy should address the reimbursement of alcoholic beverages and cover acceptable circumstances
and dollar value limits.

Employees Dining Together

The Company policy ensures that the approver of the expense report is someone other than the employee who
incurred the expense. Requiring the most senior official present to pay the bill and submit an expense report is in
line with best practices.
Tipping and Gratuities
The policy should address whether tips/gratuities are reimbursable. Gratuities are expected in the service industry
but limits must be set for the use of corporate resources. Dollar and/or percentage of bill guidelines should be
provided for each type of service and travel destination.

    •   Meals
    •   Baggage/Porter
    •   Concierge/Doorman
    •   Housekeeping
    •   Taxi
Travel-Related Telecom
Travel-related communication is fast becoming a significant Travel & Entertainment expense. Technology is
rapidly changing and as capabilities increase price levels are decreasing. This is excellent news for the end user,
but from a travel management perspective this escalating cost is one that must be addressed and controlled.

Different organizations have a variety of policies governing the purchasing of cellular equipment, personal
communication devices and guidelines governing the expensing of business calls. There is an increased focus on
this type of expense as companies are starting to realize telecommunication expenses often account for 5% - 8%
of the annual T&E budget for a typical company.

In the policy Company should include guidelines for types of acceptable communication, devices to be used,
preferred vendors, payment methods and expense reporting requirements.

Wireless (Cellular / PCS) Phones / Air Phones / Calling Cards/Remote Computer Access

In the policy, Company may want to enhance guidelines for types of acceptable communication devices to be
used, preferred vendors, payment methods and expense reporting guidelines.

Air / Rail Telephones

Except in an emergency, or when a critical business issue is involved, employees should not use air-phones, rail-
phones or telephones in car service, due to their high cost.

Car Telephones

The policy should convey whether use of car telephones is permitted and if so, how many telephone minutes may
be utilised per business trip for which Company will reimburse.

Hotel Surcharges

Best Practice Recommendation: Whenever possible, employees should be advised to avoid making calls from
hotels where connection charges apply.

Surcharges in hotels can often be substantial. When staying at a hotel, travellers should always use the company
issued calling card or Corporate Charge Card. Only long distance telephone access fee charges should be
reimbursed.
To avoid substantial charges added by hotels to telephone bills, travellers should:

    •   Press the # key after each call and wait for the tone, then dial the next phone number when making
        several long distance calls
    •   Use an 800 number for business calls whenever possible.
    •   Phone from local company offices whenever possible.

Personal Phone Calls While Travelling

Best Practice Recommendation: Travellers should not be reimbursed for any personal telephone calls made from
air-phones, rail-phones, cellular-rental car phones or hotel phones with telephone surcharges

We recommend that Company assign a specific time limit for personal calls. Employees traveling out of town for
business purposes should be reimbursed for reasonable personal telephone calls of “15 minutes” per day.

Faxes/Phone Line

Best Practice Recommendation: Require prior written approval of a unit executive for the installation and
business usage of a fax or phone line outside of the office.

Cellular Phones

Best Practice Recommendation: Permit the usage of cellular phones for valid and sustained business purposes
and require prior written approval by the business unit executive. Only business-related cell phone calls should be
reimbursable.

Cellular phone equipment purchased for business use will be reimbursed, however, purchases must be made in
accordance with company procurement guidelines and the cellular provider used must be a preferred vendor
stipulated by the program guidelines. Encourage employees to practice safe-driving techniques – DO NOT DRIVE
while using a cell phone. The use of Hands-Free equipment is also suggested and can be reimbursed as long as
the total equipment purchase is reasonable (Specify, i.e. $200).
Travel Insurance
Travel Insurance Coverage

Many organizations provide employees with a range of insurance protection whilst they are travelling on company
business. Travellers should be advised of the details of the coverage they are provided with.

Additional Travel Insurance

Company should advise of any additional coverage the traveller should take out and who is responsible for paying
the premiums. If the corporate charge card provides coverage for employees, details should also be outlined in
the travel policy.
Extended Stay/Temporary Assignment
Best Practice Recommendation: Include extended stay/temporary assignment guidelines pertaining to the
definitions of extended stay, lodging, car rentals and weekend trips to home.

Issues that may be considered in this section of the policy include:

    •   Definition of "extended stay" in terms of number of days away
    •   Extended stay properties
    •   Weekend return home
    •   Extended car rentals
Miscellaneous Expenses
To avoid potential misunderstanding, a listing of miscellaneous-type expenses that Company does and does not
reimburse should be addressed in the travel policy.

Other Reimbursable Expenses

Company‟s reviewed policy may want to list other miscellaneous reimbursable expenses including:

          Bar charges                                              Room service
          Courier costs                                            Approved Seminar Fees
          Currency conversions                                     Subscriptions
          Facsimile charges                                        Telegrams
          Gifts                                                    Telephones
          Laundry                                                  Tips
          Mobile phones                                            Tolls
          Parking                                                  Valet

Non-Reimbursable Expenses

Company should include a section that specifically lists expenses for which the company will not reimburse. For
example:

          Baby-sitter fees                                         Office supplies
          Barber/Hairdressing services                             Parking / Traffic fines
          Club membership fees                                     Personal Phone calls in excess of daily limits
          Expenses for travel companions / family members          Pet care
          Health club / gymnasium fees                             Postage costs
          Hotel room movies                                        Toiletries
          Luggage / briefcases                                     Transport to/from normal office
          Movies (including in-flight and hotel movies)
Payment Methods
The method by which your employees pay for the travel products they purchase (air tickets, hotel rooms) has a
significant and direct impact on the entire Company travel management process. The payment method used
determines the quality of the receipt, the amount of float that the company gains or loses and the extent to which
the transaction is recorded on management information reports. Various payment methods offer various levels
and kinds of benefits to organizations. Companies, therefore, must clearly understand and communicate the
implications of using each of the various payment approaches in the travel policy.

Corporate Cards

Best Practice Recommendation: Name the card supplier within the document.

To derive maximum benefits from this system, the policy should include a comprehensive section covering its use
and applications.

Criteria For Issuance

Best Practice Recommendation: We recommend that the policy eliminate any references or vagueness
concerning the optional status of receiving a Corporate-sponsored payment card.

We recommend that the policy define the specific criteria for card issuance, e.g., provide a Corporate Card to any
employee who travels once a year, or who incurs local meal and entertainment expenses (minimum dollar amount
can be specified). This ensures that the full benefits of the program, including comprehensive management
information and reduced reliance on cash advances, can be realized.

Furthermore, we recommend that the policy eliminate any references or vagueness concerning the optional status
of receiving a Corporate Card. Rather, the policy should state that a Corporate Card is required for any employee
meeting the above criteria.

Application Instructions

Best Practice Recommendation: The policy should outline instructions on how to apply for a Corporate Card and
include the name of the company‟s program administrator who is responsible for the card program, a sample copy
of the application, and procedures for completion and approval.

Card Usage

Best practice is to state in the policy that the Corporate Card is the sole authorized payment method for all air,
lodging, car rental and rail expenses, and for all meal, entertainment and miscellaneous expenses whenever
possible. Consistent use of the Corporate Card will result in accurate and comprehensive management reporting,
which can be used for vendor negotiations, budgeting, forecasting, etc. Furthermore, reliance on cash advances
will be reduced, and the company will be provided with more accurate receipts.

Billing And Payment Instructions

Best Practice Recommendation: The policy should inform employees of the Corporate Card billing system and
explain their payment responsibility.

This should include instructions to remit payment promptly upon receipt of the monthly statement and outline
suspension and cancellation procedures for accounts in a past due status. Strong language must stipulate that
the company will not accept any central billing nor provide cash advances for any employees who have had their
corporate card cancelled for non-payment.

Other Corporate-Sponsored Card Programs

Best Practice Recommendation: Inform employees of any restrictions pertaining to the use of other corporate
sponsored cards if available.

To derive maximum benefits from the company's corporate sponsored card systems, the policy should contain a
section on their proper use. These areas should be included in this policy section:

    •   Application instructions
    •   Awards/rewards
    •   Billing and payment responsibility
    •   Criteria for issuance
    •   Liability for unpaid balances
    •   Personal use of corporate sponsored card(s)
    •   Required use of card(s) for all limited or specific purpose transactions (i.e. fuel, air, automotive, fleet
        expenses)

Lost / Stolen Cards

It is recommended the policy address the procedure for reporting lost or stolen cards and give instructions for
emergency replacement of cards.

Cash Advances

Our Research indicates that cash advance is not an efficient method of paying for Travel and Entertainment
expenses. In addition to the large cost of issuing cash (and following up outstanding portions) it places the
organization at risk by increased exposure through negative float.

Issuing cash advances in small amounts will result in fewer advances being issued and keep outstanding
balances to a minimal.
Proper Documentation
Many organizations address required documentation as a subhead of various sections (reporting, expense
categories) in their travel policy. Our “best practice” recommendation would be to provide information and
documentation requirements as a separate topic so that travelers can be reminded of company receipt
requirements and can easily reference the information.

Proper control over expense documentation should address two variables: the dollar level at which receipts are
required, and the type of receipts required. We recommend that the company establish a receipt requirement for
all expenses or a minimum of $10.00 and over. Only proper and original receipts should be allowed (e.g., tear
tabs not acceptable). This will reduce the company's exposure to unreceipted items and ensure that most
expenses are documented.

Besides stipulating the cost level at which receipts are required, companies must also specify the kinds of receipts
that will be accepted. A list of proper and original receipts should be in a separate section of the policy and would
include the following:

Best Practice Recommendation: Introduce a requirement for travellers to submit their corporate card statement
with their expense report as an excellent way to control use of the card and monitor delinquent accounts. Specify
types of receipts that are acceptable for each major expense category.

The policy should also specifically disallow self-completion receipts (cash tear tabs) as appropriate substantiation,
because travellers may fill in any amount they choose to reduce your exposure to unreceipted items and ensure
most expenses are documented. Besides stipulating the cost level at which receipts are required, companies
must also specify the kinds of acceptable receipts:

     ■    Air                                   ■    Original copy of passenger coupon and copy of the
                                                itinerary. Faxed or e-mail passenger receipt for electronic
                                                ticketing.
     ■    Lodging                               ■   Hotel folio plus card-member copy of corporate card charge
                                                or other proof of payment

     ■    Car Rental                            ■   Car rental agreement plus card-member copy of corporate
                                                card charge or rental agreement that doubles as record of
                                                charge or other proof of payment

     ■    Meals/Entertainment                   ■   Cardmember copy of corporate card charge or a cash
                                                register receipt for non-chargeable items
     ■    Miscellaneous Expense Categories      ■   Cardmember copy of corporate card charge or cash
                                                register receipt for non-chargeable items, original invoice (i.e.
                                                phone bill)
Expense Reporting
Timely processing of expense reports can benefit companies in several ways. First, it allows them to book
expenses to ledgers during the period those expenses were budgeted for and incurred. Prompt processing also
reduces delinquencies and dunning activity related to the reconciliation and/or clearing of cash advances, central
bills, and corporate charge cards.

Completion & Submission

We recommend that a sample expense claim form be included in the policy. This form should illustrate where
items are to be situated and how expenses should be reported in accordance to policy. Clear instructions should
be included for completing the expense report, which will facilitate auditing and reduce the number of incorrect or
incomplete expense reports.

We also recommends that travellers be required to report all expenses by category (i.e. breakfast, lunch, dinner,
room charge, phone call etc) rather than combine them into a daily total or broad expense groupings, such as
travel. This will assist expense approvers and auditors in determining the reasonableness of expenses and
whether any required receipt is missing.

The policy should also state the required approvals, deadlines and the department/person the approved reports
are to be submitted to.

Converting Foreign Currency

The policy should provide clear instructions on making foreign currency conversions. It should clarify what rates
are to be used in conversions and provide a contact number for rate inquiries.

Incorrect / Incomplete Expense Claims

We suggest that the policy state the process for incorrect or incomplete expense claims and who will be
responsible for any corporate card late-payment fees due to such delays.
Travel Activity Reporting
The policy should indicate that travel activity reports are provided from the designated travel agency and/or on-
line booking tool. Management should be required to review the periodic travel activity reporting for trends,
adherence to departmental budget, etc.

The department responsible for processing expense reports should be required to flag and report deviations from
stated company policy. Reporting of all deviations from policy should be reported to senior management reported.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:3
posted:12/29/2011
language:
pages:38