How to achieve complete policy compliance

Keeping on top of business-related costs is key, which is why your organization has a business travel policy. But ensuring travel policy compliance can be a major headache for finance managers.

Are employees disregarding the policy in order to enjoy pricier hotel rooms? Or are they booking on consumer travel sites instead of with your company’s travel agency in an effort to save money on low-cost carriers? Is there even a chance they don’t even know what the policy is in the first place?

Compliance problems can be caused by so many different factors, from the policy itself to the tools and processes being used to enforce it. Here are five steps your organization can take right now to improve compliance and streamline employees’ experience with travel policies. 

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1. Know when to review and update your travel policy

If your company’s travel policy is outdated, this may cause a problem with compliance. But how can you know if the policy is the problem?

Here are some common reasons why your company may need to revise its business travel policy:

• A significant change in company size or structure

• Any changes in business priorities, e.g. expanding into new markets may require new guidelines for different countries

• When employees report confusion or unfairness in the policy

• Difficulty achieving 90% or higher policy compliance

• Issues with financial tracking or managerial processes

• When onboarding new tools e.g. expense tracking or travel management software

• Outdated budgets for routes and accommodation

• Too many employees booking travel outside of  the company-approved tool

Updating your policy is a balancing act. You should regularly review the policy as your company grows and changes. Still, there may be multiple stakeholders involved, so you’ll want to avoid making changes too frequently. Consider scheduling a review each quarter, or a few times per year. 

2. Allow travelers to self-book using a business travel platform

To encourage travelers to book within policy, try implementing a self-booking tool if you don’t already have one. When your travel policy is baked right into the travel booking process, travelers will have the freedom to choose the itinerary and experience they want within budget, all while staying compliant.

Without self-booking, you’re more likely to have travelers who book outside of the approved tool or process. For example, if you’re using a corporate travel agency that requires employees to call their number to book a trip and share their preferences, not every employee will be eager to comply.

Most people are used to booking their own trips for leisure travel, so they’ll be frustrated at having to go back and forth with an agent over the phone. If you don’t have an approved tool for self-booking, travelers may go outside policy and book using a consumer website instead, making it very difficult for your admin team to track expenses.

3. Understand why your team members are making out-of-policy bookings

Take note of when and why people are booking outside your company’s travel policy. You may be able to track this directly through your travel management platform.

Tracking out-of-policy bookings will help you understand if your colleagues are deliberately booking outside of policy, or if there is an issue with the policy that needs to be addressed. 

For example, let’s say you find that, while only 70% of trips are compliant with company policy, the majority of compliance issues are related to last-minute trips that are required to serve customers. While these trips are more expensive, the reasons for them are usually justified. Another example is outdated price points. Perhaps a certain flight route has gone up in price, leading to a higher number of out-of-policy bookings.

These cases would indicate that your travel policy should be changed to better reflect real-world conditions on the ground, increasing compliance.

 A few more examples of reasons for out-of-policy bookings are:

• Senior management opting for higher-quality accommodation

• Client-facing team members booking late due to customers' urgent needs

• Sales reps needing extra baggage allowance when attending events

These types of bookings can be addressed by a change in policy within your travel management platform.

4. Choose travel software that’s easy to use

If your company is using a business travel management platform to book travel, make sure it offers a great user experience. There’s a chance that travelers are booking outside of policy because they’re unsatisfied or confused by the tool or system your organization is currently using. Try gathering traveler feedback to see if you need to change your booking tool.

When you have an effective booking tool with all the functionalities travelers need, it’s so much easier to handle your administrative and financial processes. Plus, you can collect data on travel spend and compliance, so you can discover relevant trends and issues.

Your booking tool should offer:

• A clean user experience: Booking business trips should be as simple as booking a vacation. Your tool should be as easy to use as a consumer booking site, but with tons of smart management features that businesses need.

• Huge travel inventory: To keep travelers booking in one place (for easy invoicing, tracking, and more), make sure the tool you choose has the same flights and hotels you can find online. This means travelers won’t have to go elsewhere to find what they want.

• 24/7 multichannel support:Take care of your travelers wherever they are by choosing a tool that includes 24/7 support on multiple channels like live chat, email, and phone.

• No reimbursements: Employees shouldn’t have to pay for trips out of pocket. Choose a tool that consolidates travel into one invoice, so administrators can pay it directly and travelers don’t have to.

• Built-in policies: The travel tool you choose should let you preset travel policies, customize them by city, route, and department, and set up approval workflows too.

5. Build policies inside your booking tool

You can improve policy compliance by creating an automatic travel policy that works at the time of booking to allow or restrict travelers from booking certain trips.

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To get better compliance results from your travel booking tool, consider customizing your built-in, automated policy for different groups of people, such as:

• Teams or departments that travel frequently: Maybe your frequent travelers are allowed a different class of travel, or a slightly higher amount per hotel.

• Teams or departments that travel with little advance notice: For people or teams that often are required to travel with less-than-desirable advance notice, you might want to make a separate policy in your travel tool. That way, if someone books something just four days away, it doesn’t get flagged as non-compliant.

• More expensive cities: There are certain cities where it’s difficult to get a hotel for less than a few hundred dollars a night. Setting up limits by city can help make sure your policy is realistic. 

• More expensive routes: Similarly, some routes always cost more, even when compared to routes of a similar length. You can make a higher maximum for these routes, while keeping the global maximum where it is.

• Individuals with special allowances: Do your C-suite executives get to fly business class? Give them an exception in your booking tool.

The more accurately your automated policy reflects the true conditions of travel, the more easily it will be able to improve compliance around the clock—no micromanaging necessary.

To make your travel policies even more flexible, you can also look for a tool that offers dynamic pricing. Travel prices may change throughout the year during on and off seasons. With a dynamic policy, price fluctuations are taken into account, so travelers can book reasonable rates according to current market conditions while staying within policy. Learn more about flexible travel policies here.