Hello from England! This week I’m visiting a few of my wonderful clients in London, England, which got me thinking about travel time policies. Having worked for many organization including large government/defense contractors to small/mid-size commercial software companies, I must say that travel policies are the one area that seems to lack a best practice or standard in the industry. Ask any company what their travel policy is, and in some cases you won’t get any! At a minimum, companies have a travel policy which is basically an expense reporting policy – how much can be spent on meals, general guidelines about weekend lodging, and so forth. But what about travel time? That is the one area that could use some explanation.
While working for a defense contractor company, the travel time policy was generally related to driving between offices during working hours. These hours could be recorded on timesheets but travel from home to any particular office, unless it was in another state, was not valid travel time since you would have driven to an office for your normal workday anyway. At least that was the thought. OK, that generally seems valid. One thing to note is that the policy only covers travel time; you were not allowed to claim mileage between offices (unless they were out of state).
Now there are variations on this policy, such as adjusting travel time to offices based on the average travel time it takes to get to your normal working office vs. a local client site or other company office. This approach is a bit odd and requires some knowledge of a person’s typical commute to anticipate any travel time recording if they go to another location and spend more time on the road. Not necessary a benefit for the extra headache it may cause in time entry.
So local travel can have its own challenges. For those companies that tend to send consultants by train or plane to locations, the local travel ends up being a simple policy of tracking time between offices or not tracking travel time at all since it’s local. Why complicate the simple when you are dealing with bigger topics like how to track travel time internationally? Long travel periods drive the discussion of where to account for travel time. The typical debate is tracking time at a client level or tracking time as an internal administrative or overhead item. Doesn’t it make sense to track travel time by client so you can view profitability including and excluding travel time? Isn’t the travel time considered productive since without it you would not necessarily gain the client engagement or revenue from on-site work? I believe the answer to these questions may have changed over the years. Before I started TOP Step Consulting, it was quite common to have the client consider paying for travel time, albeit at a reduced hourly rate. Since the travel time would be billable, the travel time was recorded on client projects for invoice inclusion. How does this impact bill rate trending and utilization targets? Companies may have allowed an impact on bill rate trends or simply excluded these items from metrics with ad-hoc consideration when reviewing compensation.
Today, it is the opposite. It is very atypical to have clients pay for travel time and, thus, the decision of where to track travel time becomes a bit blurry. I would argue that the nature of your business and your locations may heavily factor into how travel time is tracked. TOP Step Consulting is a virtual organization headquartered in DC with a global client footprint. Travel is expected to be the norm. Due to this, I track travel time as a general administration activity. Just because I have a client in London doesn’t mean my profitability goes down due to travel time nor does my effort estimates increase to cover travel time. Maybe my next client visit will be a 15 minute drive to Maryland or a short Amtrak hike up to New York. With a global footprint and a virtual team, it is very rare that our team is able to have a local travel opportunity to even worry about travel time tracking. Travel time policies are still very much an ‘open discussion’ with metrics hanging in the balance…I’m just sayin’.