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Successfully Developing and Implementing an Effective Travel Expense Policy

While it is important to have a well-designed process and system for the Travel Expense function, without a strong policy that properly balances the needs of both the company and the traveler it becomes difficult to have a successful program.  Unfortunately, there is no universal policy that will work for every company.  In fact, it is quite challenging to even have a company-wide policy when dealing with multiple geographic regions and unique local requirements.

A recent Peeriosity PeercastTM featured a major consumer products company with global operations and over 40,000 employees.  In 2014, the company had 24 unique travel policies, many of which were conflicting, ineffective, and unenforced.  In addition, they had little in the way of compliance reporting, as well as sub-optimal use of preferred travel agents and booking tools.  After performing some analysis regarding this situation, they determined that there was a USD $3 Million estimated savings opportunity by implementing a global travel policy.

In Q1 2015, they began their journey to design and implement a global travel policy.  One of the first steps they took was to benchmark with other major corporations to determine how other companies had structured their policies, after which they created the first draft of the policy for review by members of their cross-functional teams.  As shown in the chart below, there were two primary stakeholder groups that they were working with.  The first had an employee focus and the second a financial focus.

Once the feedback from the two primary stakeholder groups was incorporated into the draft, it was then sent to the senior leadership team for their review.  The company is currently awaiting that feedback and will then develop a formal change management/communication strategy, update the system configuration as needed, and develop a governance strategy/process prior to rolling it out later in 2016.

Some of the lessons learned to this point in the project include the following:

  • Ask senior leaders for feedback early on
  • Informally benchmark with as many peer companies as possible
  • Be open minded to major changes to the legacy policy
  • Less is more!
  • Don’t include requirements that can’t or won’t be enforced
  • Input from Human Resources and the Legal/Ethics team is critical

To support the PeercastTM, primary research was conducted with members using Peeriosity’s iPollingTM capabilities.  The first polling question looked at the current status of the Travel Expense policy, with 63% of the companies indicating that their policy was “well-designed and current”.  An additional 31% responded that the policy was well designed, but was also in need of some updates.  Only 6% replied that the policy “needs significant work”.

The second poll question focused on how successful the surveyed companies were in ensuring that their policy was being complied with.  A large majority (69%) of the companies indicated that they are experiencing a high level of compliance, with 25% responding that they are having moderate success in this area.  The good news is that just 6% of the companies are only having limited success in ensuring compliance.

This research shows excellent progress by many companies in improving both the overall quality of the Travel Expense policy, as well as their ability to enforce it with their employee base.

Some of the member comments made in conjunction with this poll include the following:

Manufacturing Member: We have a department that audits every transaction submitted on expense reports for 100% compliance. We have very few terminations due to policy violations.

Consumer Products & Services Member: We updated our guidelines to an official policy for North America in 2014. In 2016, a global travel policy will be implemented. We have almost 98% of eligible spend on the T&E card and use continuous monitoring tools to audit for fraud, duplicate transactions, policy violations, etc.

Manufacturing Member: In addition to the published policy, we configure Concur in each country to ensure certain policies cannot be bypassed through the use of custom audit rules. In addition, 100% of expense reports are audited to the policy before receiving final approval.

Computers & Electronics Member: Employees do not want to take the time to learn the policy and that causes compliance issues.

Manufacturing Member: We are focusing our efforts on standardization and accountability, and expect to see improvement in this area.

How effective is your company’s Travel Expense policy?  When was the last time it was updated?

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

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“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.

Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers.   Membership is for practitioners only, with no consultants or vendors permitted.  To learn more about Peeriosity, click here.

 

 

 



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