As more businesses take part in international travel, many executives are taking a second look at their travel policies. A robust policy protects the business from overspending, helps travelers stay safe, and ensures compliance.
This checklist shows what a comprehensive travel policy should include when businesses invest considerably in international travel:
One of the first points your international travel policy should illuminate is where, when and how staff are authorized to travel. Not only does authorization lay the groundwork for developing a travel budget, but it also promotes safety and compliance. Communication channels have a greater likelihood of breaking down when there's an ocean between the traveler and the office. This initial step makes for a smooth international trip.
This section of the policy should also explain who can authorize international travel. For example, staff members shouldn't be able to authorize their own business trips. Designating a role that's in charge of this process will ensure that there is a system in place for initiating travel, preferably one backed by research and weighs any risks employees may experience by traveling to a specific place at a specific time.
Where to book travel
To control costs, your corporate travel policy should establish where staff members can book travel, if there isn't a specific role dedicated to that task already. International and domestic travel may require separate protocols. For each, you may want to designate which enterprise travel apps, travel agencies, web-based aggregators or other kinds of booking platforms employees must use. These rules should apply to all aspects of travel that require prior booking, including airfare, train tickets, lodging, car rentals, etc.
How payments are made
Will traveling employees use a personal credit card for expenses or will funds be drawn from a corporate account? How does the exchange rate affect purchasing power? Your travel policy should detail how payments will be made prior to and during each trip. Your organization may choose to have separate payment policies for domestic and international trips. For instance, certain credit cards may carry additional fees when used overseas. Others might not work at all. Indicating a specific card for international use could save money over the long run.
If employees choose to add vacation time onto their business trips, your policy should be explicit about which expenses the company will pay for.
When employees use personal funds to pay for business expenses, your policy should indicate how and when those costs will be reimbursed. For strict compliance, this portion of the policy should urge travelers to document all expenses. Additionally, your policy may explain how staff members should track expenses, whether through paper receipts or a mobile app.
Travel policy compliance is easier to establish and maintain if the policy segments spending by category. This section should strive to explain which expenses are compliant and which are not. For accepted expenses, the policy should detail spending limits and align with the previous section on personal reimbursements.
Prepaid expenses such as international airfare should have strict guidelines detailing acceptable rates, booking timelines and means of payment. For example, this section of the policy may require that employees book flights several weeks in advance to avoid the risk of fluctuating international ticket prices. Likewise, the policy may explain the conditions under which an employee can book a business-class or first-class ticket.
Abroad, rail journeys are much more common than in the states. Many of the same restrictions apply to airline and rail tickets. In the case of choosing one mode of transportation over another, the policy could specify that train tickets must cost less than airfare.
The car rental portion of the international travel policy should align with the reimbursement section unless funds are withdrawn from a corporate account. This section should indicate what types of vehicles employees may rent as well as where they may rent cars from. Travelers should also have a clear direction on whether or not they should be purchasing insurance at car rental counters.
International travelers may need a special license to operate a vehicle in another country. For safety reasons, the best policy for U.S. travelers going to destinations like the U.K. and Hong Kong, where cars drive on the left side of the road, is to not allow them to rent cars.
The rise of ride-hailing apps like Uber and Lyft has happened so quickly that many companies may not have had time to update their travel policies to include them. Abroad, these apps are still gaining ground. Many travelers enjoy the convenience these apps offer, preferring them to traditional car rentals or taxis. As with other expenses, travelers should maintain and log ride-hailing receipts as part of their expense reporting.
In the travel policy, lodging should cover a number of points, including the distance the employee in question is traveling, what constitutes a reasonable nightly rate and whether an executive can make exemptions to this rule. If the lodging is also the site of a conference and companies must factor in an entertainment budget, then further details may also be necessary.
Because prices can vary greatly between countries, an internationally focused policy should determine specific per diem allowances for each target country.
The company may place stipulations on per diems, designating them only for specific expenses. Aside from food, the per diem can also include laundry services, parking and tips. The policy should specify when the employee can expect to be reimbursed. Policies should have a separate section for client meals. For instance, the travel manager might authorize additional funds for taking clients out to dinner. An itemized receipt should be a requirement.
Crafting an international travel policy that anticipates every contingency is a time-consuming task. To learn more about how a travel management partner can help your organization improve compliance on a global scale, visit dt.com/global-services today.