Why it’s time to revamp your business travel expense policy
Back in 2020, our software partner Pleo published their annual report for the year The State of Spending: How business reacted to Covid, where they looked at how customers across Europe adapted to the new challenges as a result of the pandemic. A glaring, if predictable, statistic from that report was the shift in the travel spend category, with it dropping 76% when the initial lockdown hit and moving down two spots in the overall top ten spend categories.
Thankfully, we’re turning a corner.
From their most recent customer research, we can see that across segments and industries, travel has reclaimed its spot at the top, accounting for an average of 20% to 30% of total spend.
So it got us thinking: what’s changed, what’s stayed the same, and what’s going to stick when it comes to ways of working and business travel?
The Pleo team takes a closer look at the key drivers of the evolution of business travel and what your company can do to not only be prepared for these shifts but also keep travellers happy and make life easier for your finance team.
The best way to get started? A shiny, new business travel expense policy.
What is a business travel expense policy and why your team needs one
Simply put, a business travel expense policy are company guidelines setting out how employees can book business trips as well as spend money during work-related experiences.
An organisation’s priorities and its people might not always see eye to eye. Companies might place cost, compliance and safety at the top of their list, while employees are thinking about comfort and convenience.
A suggested amount can serve as a really useful benchmark for people when they’re trying to book something like a hotel or a train ticket.
Have everyone aligned
A company-wide travel expense policy is a great step towards establishing ground rules for everyone and transparency from the CEO down. When done fairly, there is less temptation to spend outside those limits.
But business expense fraud can still happen. A travel policy doesn’t just lay the ground rules, it also means that your people will be held accountable for their spending if they go against those rules.
Plan for the future
And when everyone knows how they can spend on business travel, it’s much easier for your finance team to forecast budgets. Reviewing how much people are actually spending when travelling for work can provide insights into where you can make adjustments in your travel policy and save some money.
Bonus: make sure your policy stays relevant
It’s crucial to refresh your travel policy continuously. The introduction of new modes of travel, consumerisation of business travel, and services like Uber and Airbnb transformed the way we travel even before COVID-19.
Not accounting for new developments in the travel landscape means your policy is likely to be insufficient for your people. Without proper guidance, their business travel experience will be unclear, more stressful, and might even make it more likely that they don’t comply to spend guidelines.
What major shifts do you need to consider when drafting up your new travel expense policy?
But Zoom fatigue will still very much be a thing. A more decentralised workforce means more business travel due to the want and need for face-to-face interactions.
Keeping up with a decentralised workforce
The working landscape has also experienced some major developments over the last couple of years. Particularly when it comes to the perception of remote and hybrid working, as the benefits for both companies and employees come to light.
In fact, having a choice of work environment is key for job seekers with 58% of respondents from the recent FlexJobs’ 10th Annual Survey wanting to be full-time remote, and 39% wanting a hybrid work environment.
The reality is that we’re all human and a key element of success and partnership is meeting in person. For example, at events like offsites and away days. But employees need clear guidelines on how they can spend when it comes to travelling to meet their colleagues or clients in person.
The blurring lines of work and leisure
With smartphones equipped with Slack and Gmail always at our fingertips and many organisations becoming more flexible when it comes to setting a work schedule, for many of us, the traditional 9 to 5 workday doesn’t truly exist anymore.
A similar thing is happening when it comes to business travel.
Many business travellers are choosing to enjoy some leisure time whilst travelling for work by extending their stay by a few days in order to experience their destination outside of the office or conference room.
And it’s definitely taking off. According to the Global Business Travel Association, more than one in three travellers will add a leisure component to at least one of their work trips this year worldwide. With fewer holidays used and lower travel costs, it’s easy to see why.
As a company, it’s important to make these so-called bleisure trips easy for your employees, not just because it can contribute to higher job satisfaction, but because it’s also been found to make employees more productive.
Adding guidelines around how people can extend hotel stays, as an example, to your travel expense policy shows that your organisation cares about their flexibility, but also makes it easy for them to plan (and budget) accordingly.
Creating your new travel expense policy
Now that you know the importance of having and/or revamping a travel expense policy, you’re probably itching to get a move on.
Follow the link to the Pleo website below and in just a few minutes you’ll have set travel spending guidelines that will keep everyone on track when they back get out on the road.
Pleo offers smart company cards that enable employees to buy the things they need for work, all while keeping a company’s finance team in control of spending.
Find out more about how BM Connect in partnership with Pleo can help your business improve efficiency and reduce end-of-month surprises. Enquire today.