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How to increase compliance with your company's travel policy

Many employees do not abide by your company's (T&E) policy for a variety of reasons. Low compliance rates can lead to unnecessarily high travel costs and ultimately undermine your organization’s financial health, as companies with high travel policy compliance rates have a 23% lower total indirect cost per traveler than companies with low compliance rates. 7 reasons why your compliance rates might be low and 6 effective strategies to increase compliance with your corporate T&E policy.

Controlling travel and entertainment expenses (T&E) is a key part of keeping costs under control and ensuring profitability at any company. Most companies attempt to do this by writing down a set of rules and emailing this travel policy to their entire staff. However, employees often do not abide by said rules for a variety of reasons, resulting in low policy compliance rates and unnecessarily high travel costs. 

This report outlines seven reasons why your compliance rates might be low and six effective strategies to increase compliance with your corporate T&E policy, so that you can reduce travel costs while increasing employee happiness and performance.

Every company with employees who travel for business, needs to balance reducing travel and entertainment expense (T&E) costs while maximizing employee performance, safety and well-being. For this reason, most companies have corporate travel and expense policies which guide employees as they travel, reduce your company’s T&E expenses, limit legal liabilities and improve financial reporting procedures.

However, a good travel policy is only effective when employees actually comply with the rules. This is not the case in many companies. A survey by the Association of Corporate Travel Executives (ACTE, 2015) revealed that 72 percent of travel managers have not yet achieved their desired travel policy compliance level. This is problematic, as low compliance rates are a sign that your company’s T&E costs may be unnecessarily high. Research from LSE Consulting (2017) has shown that companies with travel policy compliance rates of 80 percent or more have a 23 percent lower total indirect cost per traveler than companies with low compliance rates.

So how do you increase your compliance rates, while keeping your employees happy and productive, and protecting your organization’s bottom line? This report outlines seven reasons why your compliance rates might be low, and six very effective strategies to increase compliance with your corporate T&E policy.

7 reasons why your employees are not complying with your corporate travel policy

While some of your business travelers might not comply with your travel policy on purpose because they feel entitled to higher budgets or more luxurious travels, the majority of your employees actually want to comply with your corporate policy. However, there are many reasons why this is sometimes more difficult than it should be. The first step to increasing compliance with your company’s travel policy is thus understanding why your employees are currently not complying. Talk to your employees and ask them for detailed feedback to understand where the shoe pinches.

Once you understand the reason(s) why your current travel and expense policy is not working, it will be easier to devise effective strategies to increase compliance with your travel policy. We identified seven common reasons why corporate T&E policy compliance rates are low.

CHALLENGE 1: Your employees do not know you have a corporate travel policy

If your employees do not know you have a corporate travel policy, you cannot expect them to comply with it. While this may seem like an obvious reason, it is the root cause of many low compliance rates. Attaching a document to an email and sending it to the entire company is not good enough to ensure compliance. Most of your employees are busy people and it is unlikely they will even open the document attached to your email.

CHALLENGE 2: Your travel policy is ambiguous or difficult to understand

While a 20-page document might seem easy to understand to the person who wrote it, this might not be the case for time-pressed or stressed employees. Make sure your corporate policy is concise, to the point, easy to understand and apply, and employees can quickly find the information they are looking for. Also, make sure to state very clearly whether your policy consists of flexible guidelines or rather strict rules that should always be followed. Finally, make sure to outline the steps your business travelers should take in case of unplanned scenarios. What should they do in case a flight gets canceled? 

CHALLENGE 3: Your travel policy does not align with your company culture

Many companies have travel policies that do not align with their company culture or other corporate policies. This will create unnecessary confusion or frustration with your business travelers. If your company propagates leadership and decision-making by empowered employees, then using strict rules in your travel policy rather than flexible guidelines and requiring approval for small expenses might seem odd and annoy your employees. If your company propagates flat hierarchy and collaborative leadership, then employees might be unhappy to learn that senior executives fly first class while the rest is flying coach. However, employees might be happy to share rooms when they know that even their CEO does it (WJS, 2018).

CHALLENGE 4: Your travel policy does not align with your business goals

Sometimes, T&E expense policies do not match a company’s business objectives. Is the top goal optimizing the time of your employees at the destination? Making their life as easy as possible so they will perform at their best? Or spending as little money as possible? Getting a clear understanding of the goals your organization wants to achieve by sending your employees on a trip will make it easier for your employees to actually achieve those goals and will alleviate some of the confusion and frustration that comes from a travel and expense policy that does not support your business objectives.

CHALLENGE 5: Your travel policy is outdated

When was the last time you updated your travel policy? While your policy might not have changed, your employees and the way they travel and make expenses certainly have. Digital receipts, mobile applications, Uber and Airbnb amongst others have transformed the way employees travel in their private life. Moreover, with millennials entering the workplace, your workforce and expectations have also changed. However, many organizations have not updated their corporate T&E policies yet to allow for these kinds of changes, creating confusion and frustration amongst your employees. Up-to-date T&E policies align with the lifestyle of their employees and take into account the ‘bleisure’ trend and the consumerization of business travel.

CHALLENGE 6: Your travel policy is too rigid

Your organization probably consists of different types of employees that travel for different reasons to a multitude of destinations. Your travel policy should reflect this diversity. A junior sales rep traveling to a cheap destination for a tradeshow will have different needs and expenses than a senior executive wining and dining potential new clients in New York. Moreover, business travel is dynamic, and your travel policy should reflect this. Maybe one of your employees booked a room that is $35 more expensive per night but is within walking distance of the clients she’ll be meeting, while the cheaper hotel is a $20 taxi ride away. Tarring all business trips over one brush or making the rules too rigid will undoubtedly lower your compliance rates as certain expenses that make sense for your business might violate your travel and expense policy.

CHALLENGE 7: Your employees are breaching your policy on purpose

Even though this is a minority, some employees knowingly submit expenses that exceed the limits set in your T&E policy, book hotels that are not on the list of preferred vendors, book airfares without using your travel management company or ignore approval procedures. This could be because they do not agree with your travel policy, approval procedures or choice of travel management company, or because they feel entitled to a higher travel budget.

6 effective strategies for increasing compliance with your travel policy

Now that you understand why your employees don’t comply with your travel policy, you can address the issues. We identified six effective strategies that will help you increase your compliance rate, which will in turn reduce overall T&E costs, employee confusion and frustration.

STRATEGY 1: Write a clear and concise travel and expense policy

A good corporate travel and expense policy should ensure your business travelers are clear on what is expected of them at every point of their business trip. It will cover all aspects of T&E such as accommodation, meals, tips, entertainment, airline booking, ground transportation and rental cars. There needs to be clear guidance on issues such as approval procedures, key points of contact, preferred booking channels, rules for using company credit cards, gifts and favors and a list of expenses that will and that will not be approved under any circumstance.

A good travel policy will answer questions such as: Will room service or laundry service be reimbursed? What happens if an employee extends a business trip over a weekend? What is your policy concerning home-office expenses for employees that can work from home? Will business class airfare be reimbursed if it is the same price as economy?

Crucial is to explain the core principles of your corporate policy to your employees, so they understand the rationale behind the rules. Moreover, your T&E policy should define clear expense parameters that are aligned with your organization’s company culture, budgetary goals and business objectives. These parameters should be precise enough, so your employees know what is expected of them, but should also be flexible enough to take allow for the dynamics of business travel. Also, conditions under which exceptions can occur and how they should be reported should be included in your policy. Good practice is to create a clear audit trail for any exceptions granted. Finally, provide a detailed explanation of payback periods so that employees know when they will be reimbursed for expenses incurred.

While the content of your T&E policy is the most important part, do not overlook design. A nice-looking report will be more effective than a messy Word document.

STRATEGY 2: Communicate, communicate, communicate

Your travel and expense policy is only effective if employees know about it. Emailing the policy to your employees is not enough; it is unlikely most of them will read it. Rather, engage actively with your business travelers to make sure they understand your T&E policy. Your employees will be more willing to learn about your expense guidelines and procedures when you actively explain it to them and make it an ongoing conversation rather than a lengthy document.

Moreover, this will present your employees with an opportunity to ask questions, which in turn will help you improve your travel policy and boost compliance. Which channel is most effective to reach your employees – company event, corporate training, workshop, team meetings, lunch sessions – will depend on your organization. 

Also, keep in mind that every opportunity is a good opportunity to remind your employees of your corporate policy. Make sure your employees can easily find a copy of your travel policy on your intranet or server in case they want to consult it. Include your policy in your expense platform dashboard, making it available for employees every time they expense something. Make sure to include corporate travel in your company’s onboarding process for new hires, or send your employees a reminder email with your policy when a big conference or trade show is coming up, or right before they travel for the first time.

STRATEGY 3: Automate your expense management

Ensuring that your company’s travel policy is accurately applied and enforced can be a nightmare when managing expenses manually. Automating your expense management is an essential tool when trying to improve your company’s compliance rates. An automated expense management tool is tailored to your company’s travel policy and has built-in controls, which will automatically flag non-compliant expenses. Using an automated travel expense management tool effectively increases the average rate of T&E compliance by 26 percentage points according to a study by Aberdeen Group (2016), while reducing confusion and conflict about why a particular expense item has been declined.

For organizations that have different tiers of allowable expenses or different policies across countries, best-of-breed expense management solutions are simply indispensable. It can be very confusing for employees that are traveling often to different countries to remember their daily expense allowance in every single country. T&E management tools that allow unlimited configuration of business rules, such as Rydoo, enable you to clarify your corporate spending rules in a very simple way. Every individual user will immediately see how much they can spend in every country and which expenses are out-of-policy. They can then add an explanation for non-compliant expenses or remove them altogether.

As an added benefit, automating your expense management will increase employee happiness and productivity as your employees no longer have to waste precious time on tedious and frustrating tasks such as collecting receipts and submitting expense reports. Choosing the right travel expense management tool is important, however, as high adoption/attachment rates of the tool are crucial for simplifying processes, optimizing internal and external compliance, maximizing cost-savings and ensuring accurate reporting. With an adoption rate of over 90% and overwhelmingly positive end-user reviews, Rydoo has the best adoption rate of the sector.

STRATEGY 4. Reconsider the way your employees book travel.

Rather than asking your employees to follow the rules of your corporate policy, why not enforce it before they book anything? 

Modern travel booking tools, such as Rydoo, indicate straight for every travel item your employees want to book whether it is compliant or not. This way, there is no room for confusion. If your travel policy states that hotel rooms should not be more than $150 per night for a short trip, hotels that are more expensive will immediately be flagged as non-compliant when employees are searching for hotels. Moreover, it is possible to forbid employees to book non-compliant trips or require pre-trip approval from a superior. It is up to you to make the rules as flexible or strict as you want. Rules can also be completely customized and configured differently for different types of trips, users or user groups. This way, you can have perfect control.

Moreover, booking your travel through the Rydoo platform will unburden your employees from having to submit expenses completely, as expenses booked through the travel platform get pushed automatically into the expense platform. Thanks to central billing, employees no longer need to pay with their own money and there is no need for them to photograph a receipt, so they can just focus on work.

STRATEGY 5. Analyze your expense data

Tracking your expenses conscientiously will increase compliance rates by itself, as knowing that expenses are being monitored is a great incentive for employees to control their spending. Moreover, your expense data contains a wealth of information on your employees spending patterns. Mining your data for insights will help you improve your T&E policy, how you communicate about it and identify which employees you should talk to to understand better why compliance rates are low.

Which types of expenses have the highest non-compliance scores and what patterns are there across non-compliant expenses? What are the top five reasons for non-compliance? Which departments or employees submit the most non-compliant expenses? And which departments or employees are the most frugal and the biggest spenders? Maybe a certain office constantly books flights less than two weeks before travel, leading to much more expensive flight tickets. Or maybe a certain approver is a lot more lenient with her subordinates’ hotel room upgrades.

Even though the answers to these questions are crucial, they might be difficult to get, as you might have to collect data from different sources, export them, convert downloaded files into a different type of file and merge different files together. Automating your expense management will greatly simplify this process, as good T&E solutions provide you with easy to access insights into corporate spend without lifting a finger. 

STRATEGY 6. Use sticks and carrots

Once you have published an understandable and concise travel policy, communicated it to a great extent across your organization, asked your employees for feedback and maybe even allowed for a transition grace period, it is time to reinforce your T&E policy more strictly. “I didn’t know”, no longer qualifies as a valid excuse, and there should be consequences for employees who keep breaching your T&E policy.

The most effective way to increase compliance at this stage is by sanctioning bad behavior as well as promoting good behavior. Incentivize your employees by rewarding travelers with the highest compliance scores, or why not launch a competition to get the highest compliance score? For travelers that keep breaching corporate policy, warnings can be issued. Take this opportunity to talk with the employee in question to understand the reasons for non-compliance. Refusing to reimburse travelers for non-compliant claims is a last resort to correct behavior. This option should be used with care, however, as you don’t want to alienate your employee.


Many employees do not abide by the rules outlined in their company’s travel and expense policy for a variety of reasons. These low compliance rates can lead to unnecessarily high travel costs and ultimately undermine your organization’s financial health. Understanding why your compliance rates are low is the first step in improving compliance. Many employees want to comply with corporate T&E policy, but don’t for a variety of reasons. Compliance with your company’s travel policy is only a worthwhile goal if said policy is well-designed, aligned with your company culture and business objectives, and your employees’ needs and lifestyle. Talking to your employees, asking for detailed feedback and analyzing your current expense data will provide you with insights on why your employees are not (always) following the rules outlined in your corporate travel policy.

Once you understand why your compliance rates are low, you can address the issues. We outlined six effective strategies in this report to help you increase your organization’s compliance rates. One of the keys to high compliance is automating your expense management

• When implementing a T&E solution, your vendor will need a clear and unambiguous travel policy, providing you with the perfect opportunity to write, update or improve yours.

• Moreover, using an expense management solution will remind your employees of the allowed expense parameters, automatically inform them when expenses are out-of-policy and make their life easier when dealing with complex country-specific regulations or per diems.

• Finally, automating your expense management will provide you with real-time visibility into spend and actionable insights. 

It hence shouldn’t come as a surprise that using a T&E management tool increases the average rate of T&E compliance by 26 percentage points (Aberdeen Group, 2016), while also reducing the amount of time your employees spend on unproductive and tedious tasks like filling out expense reports.

Finally, it is important to keep in mind that increasing compliance with your corporate T&E policy is not a one-time thing. Ensuring high compliance rates in the long run is an on-going process, requiring constant care and adjustment. Your employees’ needs and wants will keep changing, as well as your organization’s business objectives and culture. To keep compliance rates high, it is therefore indispensable that you keep updating your travel policy. Your travel policy should be a living document that is updated regularly and stored in multiple places that are easy to access for your employees.



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