Do You Have a Company Travel Budget Policy?

[robd]

We are a small business (~$5 mil turnover pa) with 2 reps (and agents in every other state) and have recently employed a National Sales Manager who has come from a large national co. (circa $1bn pa). I have worked in both small and large companies in a financial position and have pretty much seen it all in reference to claims for expenses by employees. Based on my experience, it makes no difference working in a large or small company as to whether you will abuse "privileges" or not - probably easier in a large company (or perhaps just takes longer to be discovered).

To cut a long story short, based on what I have seen from our new National Sales Manager, he is taking the pi$$, but has also managed to align himself very comfortably with the MD who is happy with his "work" (read - MD has hand balled responsibility). My question is, do you have an expense limit for your travel? I would like to implement a company policy which dictates what is reasonable in terms of travel expenses. Do you have a budget for food per day for example? Is it best to align with a certain hotel chain or have another employee organise travel on your behalf so it is not (or so it does not appear to be) self serving?

The reps that are with the company have been there for a long time, as have I. If I see something "suss" on the CC bill, they know I will, and have in the past, just fronted them straight up and asked, WTF is this?

I am really just interested in keeping things transparent and without off-siding the the MD (who I have approached about the inconsistencies on the National Sales Managers CC account - and have been summarily dismissed) would like to have an across the board policy to cover everyone, without identifying anyone in particular.

 

[yohy?!]

For a multinational firm, our regional travel policy is probably as tight as it comes...

-Best Fare of Day, Australian Domestic (Jetstar, QF, VA) - subject to agent's selection, cannot override
-Economy Class only, Domestic and Int.
-Limit on personals meals of $30USD per day
-List of Preferred hotels only that have a negotiated corp rate (no specific chain, individually by city - 3.5-4star)
-Roaming costs frowned upon and reimbursed on an individual call basis
-Hotel internet costs frowned upon with a preference for using the local office facilities
-All travel approved by line manager, department manager and CFO (must be all they do all day!)
-Airport transfers restricted to taxis only

The entertainment costs of course are where the trickiness comes into play - we have to have approval from line manager and department head plus the line manager must not have been present at the event.

 

[Mogul]

Why not just them pay them a travel allowance as per the ATO guidelines. End of story.

 

[robd]

For a multinational firm, our regional travel policy is probably as tight as it comes...

-Best Fare of Day, Australian Domestic (Jetstar, QF, VA) - subject to agent's selection, cannot override
-Economy Class only, Domestic and Int.
-Limit on personals meals of $30USD per day
-List of Preferred hotels only that have a negotiated corp rate (no specific chain, individually by city - 3.5-4star)
-Roaming costs frowned upon and reimbursed on an individual call basis
-Hotel internet costs frowned upon with a preference for using the local office facilities
-All travel approved by line manager, department manager and CFO (must be all they do all day!)
-Airport transfers restricted to taxis only

The entertainment costs of course are where the trickiness comes into play - we have to have approval from line manager and department head plus the line manager must not have been present at the event.

Yep, these are the kind of rules I need. So, it would not be unreasonable for an employee, before he has a "meeting" at dinnertime or lunchtime, to get approval for that meeting? What I am seeing is expenses after the date on the CC statement, with notations of "meeting" in the city for $$$ plus parking etc. USD$30 per day for food - Is this 3 meals a day away from home or just a local expense per meal?

 

[robd]

Why not just them pay them a travel allowance as per the ATO guidelines. End of story.

I will investigate this too!

 

[markis10]

I would have a look at the ATO reasonable expenses schedule, frankly $30 a day for meals in Australia was from a time long ago, in 2000 I was allowed $30 per meal if not entertaining as a local employee of a large computer chip manufacturer that likes to be inside. As for meetings, that falls under FBT regime, if it meets those rules re documentation, it should not be an issue.

Resonable amounts
http://atotaxrates.info/PDFS/td2012-017.pdf

FBT and "entertainment"
http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/52028.htm&page=1&H1

 

[yohy?!]

Yep, these are the kind of rules I need. So, it would not be unreasonable for an employee, before he has a "meeting" at dinnertime or lunchtime, to get approval for that meeting? What I am seeing is expenses after the date on the CC statement, with notations of "meeting" in the city for $$$ plus parking etc. USD$30 per day for food - Is this 3 meals a day away from home or just a local expense per meal?

Right, in the instance of an unexpected client meeting we would be expected to notify for approval as soon as is reasonably possible without impacting the client - ie same day otherwise expect it not to be approved. $30USD would apply for regional travel outside AU where breakfast is normally included in the room rate (so 2 meals). markis10 is right on within AU, I believe it's $50AUD for us now per day

 

[Blinky]

We are a national company with 100 offices and about 1000 staff, and I'm one of the frequent flyer senior managers. We are not for profit, and despite having $70 million or so in the bank, are very (probably too) careful with expenditure. Our policies are:

cheapest flight on Qantas, Virgin or Jetstar (it is easy to manipulate appointments to get your airline of choice). Not Tiger.
4 star hotels from a list of two or three in each destination (if it were me I'd do a deal with Accor)
$80 a day on meals, with a weird rule that the company will pay for one glass of wine
hire cars are okay and usually cheaper than cabs
all frequent fliers have QF and DJ lounge membership
moderate entertainment expenses, not defined but managers know the deal
we all have laptops with 3G, so no Internet charges at hotels

Seems to work pretty well.

 

[ms1]

For a multinational firm, our regional travel policy is probably as tight as it comes...

-Best Fare of Day, Australian Domestic (Jetstar, QF, VA) - subject to agent's selection, cannot override
-Economy Class only, Domestic and Int.
-Limit on personals meals of $30USD per day
-List of Preferred hotels only that have a negotiated corp rate (no specific chain, individually by city - 3.5-4star)
-Roaming costs frowned upon and reimbursed on an individual call basis
-Hotel internet costs frowned upon with a preference for using the local office facilities
-All travel approved by line manager, department manager and CFO (must be all they do all day!)
-Airport transfers restricted to taxis only

The entertainment costs of course are where the trickiness comes into play - we have to have approval from line manager and department head plus the line manager must not have been present at the event.

Gee that is tight!

-We have the "cheapest fare" rule however there are plenty of ways around this and I always pick the flight I want. 99% of the time on DJ. Always book saver on the departing flight and flexi when returning home (don't really need it.. just doing it for the extra SC's so I explain to them that I need the flexibility).
-Domestic and short haul is always in economy and long haul is in business
-Limit is $50 per meal per person
-We have preferred large hotel chain
-Work mobile is provided along with telstra 4g mobile broadband which only works in Australia. Overseas we can use expense the internet in the hotel room.
-All charges go on corporate amex which is approved by direct manager each month.
-Taxis to and from airport and we can hire cars wherever required.

 

[AussieTim]

For a multinational firm, our regional travel policy is probably as tight as it comes...

-Best Fare of Day, Australian Domestic (Jetstar, QF, VA) - subject to agent's selection, cannot override
-Economy Class only, Domestic and Int.
-Limit on personals meals of $30USD per day
-List of Preferred hotels only that have a negotiated corp rate (no specific chain, individually by city - 3.5-4star)
-Roaming costs frowned upon and reimbursed on an individual call basis
-Hotel internet costs frowned upon with a preference for using the local office facilities
-All travel approved by line manager, department manager and CFO (must be all they do all day!)
-Airport transfers restricted to taxis only

For one of my larger clients that I consult for, their policy seems much more reasonable - for international travel:
- Economy, cheapest upgradable fare with choice of airline.
- Exit row/premium seating provided.
- Premium Economy/Business if pricing is within reason (must be approved prior).
- "Reasonable" expenses for food/taxi/private car.

The catch is the definition of reasonable depends on your performance.

@OP: If your sales person is amazing and the results are worth the expense, turning a blind eye within reason can be a good policy.

 

[yohy?!]

Gee that is tight!

Yup, doesn't help when your parent is a US company whose industry was one of the hardest hit from the GFC

 

[Bolthead]

Flights - Cheapest on the day, flight schedule obviously is important to suit the nature of the business. Any flight under 8 hours Y, domestic or international - any flight 8 hours or longer Y+. All flights booked by CEO's PA.

Meals: don't go overboard.... i.e main course, desert and 1 or 2 drinks. (similar to what you would have at home) If entertaining normally no issue with food (it's a bit odd to tell a customer they can't have an entrée) but don't go overboard when you drink. It depends on the importance of the customer. Every staff member that has a travel budget is monitored on the $ spent.

Hotels: Normally between $100-$150 AUD but depends on domestic or international location and the demographic of the location. It also depends on whether breakfast is included and other things like internet etc... Hotels can be booked by you or the PA. It is sometimes difficult these days to get a good hotel at these rates so once again discretion is used.

Internet: Domestically use hotel if possible (for lengthy times) or internationally use hotel and MacDonald's Roaming frowned upon (once a manager came back from Asia with a $2K roaming bill and he didn't think that was over the top)

Local travel restricted to taxi's or using long term car park at airports. No valet parking.

No corporate airline club memberships.

All travel involving air travel or car rental requires form filled out with line manager approval. Any local travel overnight using you car (in our case company car) does not require approval for anything.

These rules are the same for everyone.... no exemptions including CEO.

We are a publicly listed company with about 150 staff.

 

[Blinky]

At the moment my company is over the travel budget (we opened 25 new offices since July, what did they expect) and although travel accounts for only a few percent of our overall budget, the Board is riding my GM very hard. I've started to organise MEL-BRI day trips to save money. Extremely tiring.

 

[Simo]

I own a small company and I pay a meal allowance.

If there is any other costs the staff member has to bring a receipt and it will be paid if deemed.

Last time one of my staff members had to travel the meeting was at our National office and it is quicker to get a train than drive to the office and then finding a park is just a nightmare in central BNE.

The staff member lost his train tickets so could not claim the expense. (Hard rule)

He got a win because he had a night away and they put a lunch on both days and also a breakfast one morning and also a dinner as well on the main night.

Where I use to work which was a large corp.

Our Travel policy was very strict.

Up to $40 for dinner with $10 beverages

Up to $15 for lunch and breakfast.

Accommodation was to be at Flag or Best Western hotels(Long time ago working there) Or app $100 per night unless there is no options. I spent over $300 on one night once but could not be avoided. Accommodation had to be arranged before travel to avoid cost blow outs.

Entertainment expenses had to be pre approved and there was a dollar limit per person.

If you had a unknown entertainment expense there where some key clients that could be entertained but you would have to have some good results in the next few days.

 

[pauly7]

For a multinational firm, our regional travel policy is probably as tight as it comes...

-Best Fare of Day, Australian Domestic (Jetstar, QF, VA) - subject to agent's selection, cannot override
-Economy Class only, Domestic and Int.
-Limit on personals meals of $30USD per day
-List of Preferred hotels only that have a negotiated corp rate (no specific chain, individually by city - 3.5-4star)
-Roaming costs frowned upon and reimbursed on an individual call basis
-Hotel internet costs frowned upon with a preference for using the local office facilities
-All travel approved by line manager, department manager and CFO (must be all they do all day!)
-Airport transfers restricted to taxis only

The entertainment costs of course are where the trickiness comes into play - we have to have approval from line manager and department head plus the line manager must not have been present at the event.

Ouch that sounds tight! Remind me not to work there

 

[Simo]

International/Data roaming charges can blow out travel costs.

I had one customer whose IT department set up the phone and said it will be all ok to use overseas for data.

It failed and the company had over 30k international roaming data charge.

The staff member didn't use the phone for any voice as she was advised not to.

 

[robd]

@OP: If your sales person is amazing and the results are worth the expense, turning a blind eye within reason can be a good policy.

Agree totally. Unfortunately, this is definitely not the case. He has a real propensity for gadgets, and has spent the last six months blowing our advertising/promotional budget with stupid coughpy pens, golf balls etc. etc.... We are a wholesale business with some generic products and some brand exclusive products. Seriously, giving customers a friggin' pen, aint gonna do it. Our model (particularly in relation to the generic products) as a point of difference apart from price competitiveness, is definitely our service.

I also understand the concept of spending money to make money, but there must be some relationship between the two in terms of financial return. Some people can't acclimatise going from big business to small in a financial sense. Their just happy to be the BIG FISH in the little pond!

 

[harvyk]

We follow ATO guidelines for meal and incidential expenses, I'm also given a hotel allowance and it's upto me to find a hotel which fits in to budget.

We can pick out any flights on any carrier we like, and we're all treated like adults when it comes to arranging our own travel, which basically translates for myself that as long as I am where I need to be at the times I need to be there, there is no problems.

Edit, in noticing the question posed in the title is not what is really been asked, I guess the question is always, is it your responsibility to follow up with the MD? If this guy is taking the piss,then chances are they are not doing their job, and they won't reach their targets. Think of it as enough rope to hang themselves with. Of course the other way to look at it is, if he is making the targets, what does it matter how the job is been done? I know with my guys that at the end of the day all I care is that the work has been done properly. I don't exactly care about the details, just the result.

 

[anat0l]

I would've thought that, except for S&MEs (where they may or may not have one), pretty much every single company who reasonable expects travel, will have a travel policy (as well as a risk assessment process).

Our policy at university is a bit complex. Generally, the university has its travel guidelines and we all have to follow the same travel documentation and lines of reporting / approval. But the university guidelines are not strict enough that there is some 'flexibility' at the division level.

For example, the university's policy on fares is not strictly best fare of day, but it is often understood that there is no reason to book a better than best fare of the day unless it is practically necessary. Also, there are guidelines which set out that staff who are of a certain rank may consider Business class fares, and mainly only for international travel. First class travel is virtually unheard of unless you are the Vice Chancellor.

That said, general guidelines in our section are:

• Best fare of day on Qantas (followed by Virgin Australia then Jetstar, depending on fare availability to destination) within Australia. Outside of Australia, best fare of day on Qantas, unless the price differential for Qantas compared to the next reasonable carrier is large. We are generally able to search and request our own flights (after all, we are the ones who know what is the size of the research grant / consultation fund which is paying the travel), but in the end our flight bookings must be completed by Campus Travel (a division of Flight Centre).
• Hotels - generally $100 - $150 per day. Special exceptions may apply if stay is longer, or in areas where there is no choice on accommodation (e.g. remote areas and accommodation is expensive).
• Meals - we generally follow the Australian Tax Office guidelines. The allowances fluctuate slightly depending on:
  • Country/ies travelled
  • Type of employee travelling (student/researcher/contractor, staff rank)
  • Whether travel is in cities (urban centres) or in remote areas (e.g. field sites)
  We have a spreadsheet set up by the university that calculates these allowances for us. Roughly speaking, most budgets end up being about $60 - $90 per day on meals and small allowances (e.g. coffee). That said, it is understood that all receipts (even for small items) must be kept and itemised on expense reports (upon return), and that most people will often not reach the upper end of the meal allowance. Generally, alcohol is not permitted to be expensed, except possibly reasonable amount accompanying a meal.
• Transport (including airport transfers) - anything is permissible (except obvious stuff, like no limos); generally taxis are used (using Cabcharge vouchers), but hire cars may be used as well depending on the travel. Public transport is also acceptable. It's usually down to practicality and safety (e.g. in some countries, risk assessment says that the use of taxis is to be avoided).
• Communications - no strict guidelines, though reasonable use and expense is advised. Most departments (including us) have a few USB 3G units which we lend out on a case-by-case basis. Most of the time, most will end up using the internet facilities at the client site, if available. Internationally, roaming is pretty much off-limits, unless absolutely necessary / emergency. In this case, local sims and hotel internet at reasonable prices and suitably restrained use will be permitted expenses.

Expenses must be estimated in advance and any variations (especially over) must be justified upon completion of the travel. A fairly detailed expense estimate must be approved as part of the process of travel approval; generally the approval for travel must be granted by three people: line manager, department/division/faculty director, and finance manager. (Additional approval must be sought from the deputy vice chancellor for high risk travel).

Note that the travel guidelines are just that - guidelines. In many cases, the actual expense which is 'tolerated' is a strong function of the funding source (this is why the university is very different to private enterprise). Some projects are worth millions and generate similar orders of magnitude outcomes, so the amount for permissible expenses is a bit more liberal. On the other hand, smaller funding sources used sometimes for discovery projects may only be designated as an offset or subsidy, so it is not uncommon for people to claim smaller amounts against the project budget, and likely supplementing the rest out of their own pocket. Generally anything can be afforded with the approval of your line manager, director and finance manager. This last line may continue to cause you grief in your dilemma even if you institute this new travel policy. (Not that this is a bad thing to do - yes it is bureaucracy, but for larger organisations where travel can be a both integral part and significant portion of expense of the business, clear travel policies, allowances and documentation become important mainly for the purposes of budgeting and client accountability).

 

[Oneworldplus2]

I usually get a call saying "Your booked on flight xyz to go from A -> B on this time/date". Company books hotel and hire car. We get LAHA, can't remember the amount, l think it's $50 a day (could be more). Usually QF/VA, no JQ or Tiger. Most of the NZ guys fly AirNZ across the tasman.