By: Wavel Joseph, CPA
When was the last time you looked at your organization’s travel policy? Is the policy as written still relevant given the changes in technology and the changes in your organization? Like all policies, a travel policy should be a living document that is revisited and updated periodically to ensure it reflects the organization's current situation. Travel policies can vary in content and detail, depending on an organization’s size and the level of travel required by staff, so there is really no one-size fits-all approach. This article will discuss some of the basic issues to consider and key questions to address when establishing or revising your travel policy.
Procedures for Authorized Travel
The document should clearly define procedures for authorized employee travel and guidelines for employee use of the organization’s funds.
- A department head or manager should determine whether or not travel is necessary in the first place. Given the recent advances in technology, some meeting travel may no longer be necessary. Once that decision is made, the manager should sign an authorization form before travel arrangements are made.
- The policy should address hot button issues such as whether employees should use the fastest way to get to their destination or the least expensive way to get there. The most direct and economical means should be considered while also taking into account employee safety and comfort.
- The use of corporate charge cards should be addressed. Who retains the rights to frequent flyer rewards? Most companies allow employees to retain the benefit. If there is more than one employee at an event, who should pay for reimbursable expenses? Generally, the highest ranking staff member should pay.
The policy should consider who is subject to the travel policy and should apply equally to all levels. The policy should be consistent and fair to your employees. The policy should apply to all official travel, including travel funded under federal grants and contracts.
The policy should state how many employees and executives would be allowed to fly on the same flight. Plans have to be considered for unforeseen incidents.
Types of Expenses Covered
The policy should define the types of expenses that would be covered by the organization, such as air travel, ground travel, hotel accommodation, meals, telephone calls, etc. It should also clearly state the types of expenses that would not be covered (e.g. the purchase of personal items, in-room movies and entertainment, etc.). Allowable expenses should be "reasonable," and should be approved according to the policy.
Implementation and Enforcement
It’s also important to have employees acknowledge the rules set forth in the travel policy and understand that they can be held accountable for any violations. One of the best ways to do this is to have employees sign the travel policy to affirm that they have read and agree to abide by the required guidelines. After the policy has been implemented, you should ensure a reliable system is in place to notify employees of any changes to the travel policy.
A standard expense reimbursement form should be established. The form should be submitted within a specified time period. Supporting documents should be attached to verify expenses. The expense reimbursement form should be signed by a department manager, and then forwarded to the accounting department.
Any exceptions to the organization travel policy should be evaluated on a case-by-case basis. The Chief Financial Officer or the Executive Director should be able to make the final decision when a particular situation is not addressed by the policy.
Wavel Joseph, CPA serves as a CFO for Tate & Tryon’s Accounting Services clients and can be reached at firstname.lastname@example.org.