SUBMITTED BY DataServ

Implementing a solid Travel & Expense (T&E) System involves much more than choosing the right software. Here are six tips for successfully implementing – or simply improving compliance – with your travel and expense policy.

Make sure the policy matches your culture.  Corporate travel expert American Express emphasizes the importance of considering your company’s values and goals in developing your T&E system. Confused on exactly how to do that? American Express offers detailed guidance in Building a Best-in-Class T&E Policy,” starting by defining your company’s culture as either “relaxed” or “restrictive.” If your company is more of a “relaxed” or Employee-Oriented culture, you might consider a policy that includes internal cash advances - allowing travelers to make their own vendor choices - and class of service (for air, hotel, and rental cars), along with reimbursement of club membership dues. A “restrictive” or Business-Oriented culture might require employees to book through a designated travel agency, follow strict guidelines for class of service, and assign spending limits or guidelines for meals. 

If your culture is grounded in specific principles, make sure they are reflected as well.  For example, if your company is an eco-friendly one, be sure to consider the impact of travel on the environment. You also may wish to include incentives for taking public transportation or staying at eco-friendly hotels when you craft your policy. You can even set up your T&E system to ensure it is paperless – a bonus not only for saving trees but also for high-travel employees who rarely have printer access.

If your company prides itself on being family-friendly, consider incorporating policies or language to reflect that value in your travel policy. For example, you may allow travelers to spend more on airfare if it allows them an extra night at home with family, or address issues related to childcare expenses while employees are away from home. A “techy” company will want to make sure that its travel policies, as well as its expense reporting procedures, are up-to-date with all of the latest online and mobile capabilities.

Communicate the policy and the system.  If travelers aren’t aware of the policies and procedures you’ve put in place, or don’t have easy access to it on a day-to-day basis, it doesn’t matter how good that policy is.  Make sure all of the details (the devil is in the details, right?) of your policy are clearly written, reviewed and distributed at least annually, and make sure it’s easily accessed by employees no matter where they are. As changes in the travel industry occur (think checked baggage fees), make quick updates and use the update as an opportunity to remind employees of the policy’s content and accessibility.

Put the right people in charge.  Not everyone is cut out for the job of developing and enforcing the company’s travel policy.  Make sure that the right person, or team of people, is assigned to this important task.  According to Kathi Haller, CFO of DataServ and former auditing executive, there are several traits that make up a successful T&E professional:

  • Always keeps the company’s best interests in mind.
  • Retains an independent perspective, maintaining an appropriate distance from employees who are traveling under the company’s policy.
  • Shows good judgment, understanding when a hard line is needed and when a warning or more measured approach will suffice.
  • Is able to handle difficult situations with disgruntled employees.
  • Has strong communication skills and takes a non-adversarial approach when dealing with employees, while being comfortable raising and handling issues as they arise.

Make a decision about corporate credit cards.  Corporate credit cards for employee travel are becoming much more common, providing convenience for both the company and the employee who travels.  Corporate cards eliminate the need for cash advances, reduce reimbursement checks, help keep detailed records of business spending, and help the company earn rewards through credit card points. While most employees will use the company card responsibly, if you do issue them, expect additional time spent handling lost or stolen cards, monitoring the card activity, and reviewing statements.

Once you’ve decided to move forward with a company card, you’ll need to decide whether the employee will pay the card balance each month and be reimbursed through your T&E system, or if the card will be company-paid (direct).  If the employee will be paying the credit card company, it is likely that he or she will have to qualify for the card as an individual, which can be challenging in some instances. In this scenario, it is also possible that the employee will receive the card benefits (points) instead of the employer, which may mean the loss of a significant benefit to the company. If the company pays the card directly, these issues are eliminated, but others crop up. It’s more challenging to reconcile expenses, and there is a tighter auditing window, since expenses must be reviewed and non-compliance addressed prior to paying the bill each month.

Automate.  Automating your T&E reporting system has numerous benefits (check out our blog post on the Top 5), but one of the nicest is that it takes the “personal” element out of the mix, making it easier for both the traveler and the accounting department to handle issues and thereby improve policy compliance.  Products like DataServ’s Expense Report Automation SaaS solution  can help reduce reporting costs, improve turnaround time, and control travel expenses.

Ensure compliance with regular audits.  It’s important that the policies you’ve worked so hard to put in place are audited for compliance, as non-compliance – and the fraud that almost every company faces at some point - can result in higher costs to your organization.  Compliance, according to American Express, is the ultimate measure of a T&E policy’s overall success.  DataServ’s Kathi Haller recommends that you audit consistently with your pay periods, or at least monthly in the following ways:

  • Reviewing every expense report over a specific, pre-determined amount (for example, $1,000), which might vary based on the size of your company and the type of travel taken by your employees.
  • Auditing 100 percent of expense reports submitted by repeat offenders, or “cowboys.”
  • Random audits of 10-20 percent of all other expense reports.

When auditing, look for any expenditures or reporting that is outside of company guidelines, then communicate and resolve the issue with the employee right away.  Employees may not be aware that they were out of compliance, and this reminder can be a great way to re-familiarize them with the company policy to ensure future compliance.  Make sure your policy includes a clear outline of how employees will be warned as well as the consequences for further infractions.

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