Corporate travel and expense policy compliance is a constant theme in the business travel industry. Although using the corporate expense policy manual as a stick to beat your travelers may be a short-term solution to enforce compliance, it doesn’t address the underlying issues of why employees don’t adhere to the policy, and could also alienate travelers by imposing regulations that reduce productivity and create frustration.
The first thing to understand is why do employees sometimes deviate from corporate policies? At the two extremes, there are those who simply don’t know about the organization’s policy, and those who are flagrantly – and sometimes fraudulently – abusing corporate expenses for their own benefit. Although business expense fraud is estimated to cost about $2.8 Billion per year in the U.S. alone, almost 95% of employees are honest with their expenses. Therefore, in the middle of these two extremes is a majority for whom the policy is simply too restrictive.
In order to minimise out-of-policy spend, companies need to find the middle ground between enforcing an overly restrictive policy that alienates staff, and one that the team loves, but which doesn’t adequately do its job. One of the biggest challenges is that policy compliance and traveller happiness aren’t the most obvious of bedfellows. On the one side, a prescriptive set of rules that dictates which vendors they use, on the other hand, business travellers who may not wish to be bound to using a particular hotel chain, airline.
Further reading: Expense best practices to delight your employees AND your CFO
Here are five ways that organisations are minimising expense leakage while keeping the workforce engaged:
- Help them to help themselves
Most people are inherently honest, and violations are more an oversight than deliberate. Educate them on the policy and give them the tools to guide them and stay within the guidelines. There are even expense management solutions which remind business travellers of your corporate policy while they are building their trip pre-approvals.
- Learn the who and why of policy violations
Analyse your team’s travel bookings and expense claims to see who the biggest culprits are. Before you try to force them to adhere to your policy, find out why they bend it. There could be a very good reason. There is expense management software with audit filter capabilities built in so you can generalise about the type of traveller to target and hone in on the types of expenses to audit.
- Make a policy that works
Work with your team – even those who violate your existing policy – to create a solution that works for every party. If needed, build in tolerances for specific traveler groups, to ensure that policies don’t negatively impact team productivity or business success. If you need a good starting point, please use this Expense Policy Template which you can fine-tune for your organisation.
- Offer a carrot…
Although sticking to policy should be everyone’s goal, providing financial incentives to adhere to policy could increase compliance. Done right, it could save your organization much more than it costs. For more on weaving in employee perks to your expense policy, please download the whitepaper 10 Expense Management Best Practices.
- …and a stick
Obviously it’s better for staff to voluntarily comply with your travel and expense policies. However, you can use technology solutions to both track policy violations, as well locking down employees’ ability to purchase and submit out-of-policy expenses for reimbursement.
If you want some more information on how to keep your travellers happy while keeping a close eye on the company pocketbook download our latest white paper, Charting the Course Between Compliance and Contentment: Managing Cost Control While Maintaining Employee Happiness.
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- IDC Recognizes Chrome River as a Leader in Enterprise Expense Management
- Making the Best Mobile Expense Solution Even Better
- Getting Your Users in Peak Form with Chrome River Training Camp
- Empowering our Customers’ Administrators with Configuration Self-Service
Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.