Travel & expense policy for sales employees
Creating an effective sales travel policy is crucial for companies with a team of traveling sales reps. It becomes even more important when your top-line revenue comes from them traveling across towns, states, and time zones.
If not done carefully, your employee travel policy could actually hinder your team’s want or ability to travel to close deals. In today's climate, businesses need to combine human resources, sales, finance, and travel teams to create a travel and reimbursement policy that not only your sales team understands, but one that motivates them to drive revenue for your business when traveling.
With 1.3 million people traveling for work every day in the U.S. alone, the importance of policies like this is second to none, especially for salespeople.
Not sure what a sales travel expense policy should cover? You're in the right place. You're about to discover the ins and outs of on-the-road employee expenses, client entertainment expenses, frequent flyer miles, phone usage, reimbursement, and more, to create a policy for your salespeople that's equal parts effective as it is usable.
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What is a sales travel policy?
A sales travel policy outlines the essential aspects of business trips for sales professionals that are frequent business travelers (FBTs). With clear rules, this policy acts as a guide on what employees can and can’t do when traveling.
If you already have a travel policy for employees, you may doubt the need for another policy customized just for your sales team.
However, the truth is, customer-facing sales teams travel more frequently than regular employees. Plus, they often spend more on client entertainment, multi-city traveling for deal closure, and so on. It's a good idea to create a separate travel policy for salespeople that offers better care to their particular needs and keeps travel costs under control.
A comprehensive sales travel expense and reimbursement policy should contain:
Frequent flyer miles
Incidental spend limits
Non-reimbursable items
Client entertainment expenses
Accidental insurance coverage
Phone usage related expenses
Tax and immigration compliance
Mileage rate imposed by the IRS
Process for business trip booking approval
Thresholds for accommodation expenditures
Preferred booking companies for ground transportation, flights, trains, etc.
It’s important to note, a travel policy is not a one-size-fits-all solution. Prices fluctuate depending on the season, the location, the provider, and so much more. Perk enables you to set dynamic budgets, which give your booking policies a prescribed flexibility depending on these booking variables.
Plus, people-focused sales policies help companies to generate revenue while offering traveling employees freedom and flexibility for their trips.
Sales trip approval process
Sales is fast-paced; it’s an environment that's on-the-go as much as your employees are. It means it often requires sales employees to travel on short notice. Some occasions may even need them to travel immediately.
An effective sales travel policy should address all these needs by including:
Class of service for sales trips
Options for out-of-policy approvals
Preferred vendors or ASAP travel agencies
Approval policy for regular business travel
Rapid communication channels for business travel approval
The approval process for immediate sales travel requirements
Having a clear sales trip approval system in place helps sales team members to opt for the best approval process for their situation.
Ground transportation and air ticket reservation policy
An easy-to-understand ground and air travel policy helps employees understand what’s allowed and what’s not.
For example, here are some points that you can address in this section:
Preferred airlines
Open booking policies
Car use restrictions for business purpose
Provisions for booking through a non-typical vendor
Rental companies to choose for ground transportation
Flight seat preferences (economy, business, and first-class)
Preferred type and size of vehicle (4/6/8-seater, SUV, sedan, hatchback)
Options available for booking a rental car (advance or on-spot, online/offline)
Additional airfare allowance for upgrading flight tickets (i.e., while flying with a customer)
Since salespeople are typically on the road for a long period of time, it’s important to create a flexible policy that prioritizes their comfort while meeting business goals and budgets.
Spending thresholds for meals and accommodation
Keeping your sales travel policy fair and sensible is key to driving sales performance. Make sure you clearly communicate spending limits for:
Room service
Meal expenses
Lodging expenses
Types of rooms covered
Out-of-pocket expenses
Preferred star ratings for hotels
Per diem allowance rates for all states
Frequent flyer miles and mileage reimbursement
Companies often struggle with deciding whether to obtain frequent flyer miles or allow employees to use them. Plus, more often than not, employees need to use their personal credit cards when making bookings in order to claim back frequent flyer miles.
However, when employees book business travel via Perk, they can simply add their loyalty/ frequent flyer card number to their Perk account and will claim miles or rewards automatically—wherever possible—there’s no need to claim them back manually.
When employees book with Perk, they no longer need to book with their private credit cards—eradicating any personal financial fears they may have about booking themselves.
Successful companies, with people-centric cultures and processes like this, motivate employees to enjoy their business travel, and every step that comes with it.
Client entertainment expenses
This is another tricky area that companies should treat with utmost care. Some of your sales employees may be trying to close multiple clients during a visit to another city, state, or country.
This adds a significant amount to the client's entertainment expenses so having a pre-approved limit may not be much help and can be hard to predict.
For example, wooing clients often means taking them to business meals or even sporting events. These situations require your sales employees to use their judgment and run rapid expense management calculations to determine if it's worth the cost.
Alternatively, you can also set up a per diem rate for entertainment, although some employees may view their maximum budget as a goal—rather than a cap.
Phone usage
Salespeople usually spend a lot of time on their cell phone in order to efficiently do their job. They're nurturing prospects, creating partnerships, and hopefully closing deals. This means their phone usages go up as they travel for business, especially if they're in a foreign country.
A sales travel policy should clearly define policies around phone usage and reimbursement:
Long-distance call policy
Data cost reimbursement
Work and personal phone usage
Fixed phone and data plan reimbursements (if any)
Reimbursable expenses (i.e., wifi hotspot purchases)
Reimbursement and non-reimbursable items
Reimbursement regulations are at the core of any travel policy. If your company doesn’t cover certain expenses during sales trips, this section should list all those non-reimbursable items.
Some of the most common non-deductible items are:
Pet boarding
Childcare cost
Membership cost
In-flight purchases
Airline ticket upgrades
Parking violation tickets
Dry cleaning and laundry
Excess baggage charges
First-class rail transportation
Personal travel arrangements
Items purchased for personal use
Personal expenses during the trip (i.e., movies, minibar drinks, etc.)
Make sure this section outlines the process to follow for claiming business expense reimbursements. Companies using expense claim processing tools should clearly state rules for uploading reimbursement requests, expense reports, VAT receipts, or proof of purchase and the timeline within which employees can expect reimbursements.
Tax and immigration compliance
When an employee works in a state away from their home state, it results in tax reporting liability. Mention corporate income tax filing requirements for frequent sales travelers, as this may affect them.
In addition to tax compliance rules, you should clearly outline immigration compliance rules. Failure to follow immigration rules and procedures may result in penalties, fines, and travel restrictions for your employee or business.
Bleisure Policy
Bleisure travel intends to combine business and leisure. Additional information on this will help your employees understand when they can take a leave for leisure during the trip and for how long.
Wrapping up
If you have a sales team of three or more frequently traveling within or outside the state, it’s wise to create a sales travel policy that's unique to them. This will help you manage sales travel seamlessly and tie travel expenses with business profitability.
Managing travel and reimbursement for the sales team becomes easier with an all-in-one corporate business travel system like Perk. This helps you not only to manage bookings and expense claims but also to have better commercial visibility of spending.
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