The Travel Expense Reporting process is typically an insignificant component of the overall shared services effort from a complexity, headcount, or cost perspective; however, because corporate travelers are most often senior-level employees or staff with direct roles in the sales effort when it comes to image, the T&E process gets a lot of attention. For Shared Services managers, while delighting the customer is a worthy objective when it comes to allowing exceptions to travel policy for the purpose of saving money, it might actually be a bad idea.

We’ve all seen requests for exceptions for purchases that fall outside of guidelines for reasons that are justified as being in the best interests of the company.  One Peeriosity member company recently identified instances where employees actually went outside of the travel expense policy in order to save the company money (for example, by using personal airline points or rewards to save money and then asking for reimbursement for their personal credit card membership).  They were interested in knowing “where to draw the line” when permitting these types of expenses.

To better understand the issue, the member worked with Peeriosity to create iPolling^TM questions to find out how often exceptions for the purpose of saving the company money happened, and when they did, whether or not the manager’s pre-approval was required.

The results suggest that while almost all companies only infrequently allow “cost-saving exceptions”, for 65% of member companies these types of exceptions do occasionally happen.  However, at 32% of member companies, these types of exceptions were not permitted under any circumstances.

Reading the comments of iPolling respondents is helpful for developing an understanding of why allowing exceptions may be a bad idea, even when the initial reason is to save money.  Here are some of the comments:

• “Duty of Care”, where we have an obligation to ensure the safety of the traveler, requires that we secure all travel arrangements.  It is also very hard to validate savings that are outside the approved process against lost credit card rebate revenue, added insurance risk due to coverage missed by not using the card, and costs for unexpected changes. If an employee elects to drive instead of fly, we reimburse up to the lessor of airfare or the cost of the car expenses (car rental costs, or, in some instances, personal mileage).
• While on the surface exceptions may appear to save money, employees requesting exceptions are not aware of the negotiated rebate rates and other benefits and controls built into the defined usage of travel service providers and T&E Card providers.  The benefit typically isn’t significant and it’s not worth the risk to either the traveler or the company.
• Even though various travel types may have cost advantages, it has to fall within the policy in order for us to approve the expenses.

For companies that permit policy exceptions, for 79% of the companies manager pre-approval is required.

Here are some of the comments related to required approvals:

• Exceptions to our T&E policy can only come from the Vice President level within Finance. Manager approval is not sufficient.
• We have strict policies in place and exceptions need to be approved at a high level of management.
• We have strict policies that require executive-level approval for an exception. In addition, we have policies related to non-preferred air/hotel/car rentals that require manager pre-approval in writing.  The written approval must be submitted with the receipts when the expense report is filed.
• Booking outside of the travel management policy is rarely done. To do so requires VP-level approval. This high level of approval is really done as a deterrent. The company has a corporate responsibility to keep its employees’ safe while on travel. Booking travel that is in compliance with travel management policy guarantees a link to the employee through the contracted Travel Safety and Security service. The safety of the employee is the priority.

Does your company allow T&E policy exceptions when the reason is to save the company money? If yes, what type of pre-approval or post-approval is required?

Who are your peers and how are you collaborating with them?

 “iPolling^TM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated e-mail system, Peer Mail^TM, members can easily communicate at any time with others who participate in iPolling.