Mileage reimbursement is when an employer offers employees monetary reimbursement if they use their personal vehicle on behalf of the business. If you’re an employee, an employer, or a self-employed worker, understanding how mileage works is important and can help you save thousands of dollars every year.
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Every year, mobile workers track, report, and submit tax returns. To do this accurately, you’ll need to understand the various changes that come year to year.
You need to ask your accounting professional or CPA the right questions when tax time is rolling around. In order to ensure you’re getting reimbursed accurately, you will need IRS-compliant mileage logs.
Trust the Experts at TripLog.
As the market’s foremost mileage experts, we have designed this information hub to help answer all of your pressing questions regarding mileage:
What are some mileage reimbursement methods (FAVR, IRS rate, etc.)
What are the differences between mileage rate reimbursements and income?
Should reimbursements be provided to employees? If so, how should they be done?
How do I know about the current mileage reimbursement rates?
How does the IRS determine the current mileage reimbursement rates?
Are the federal mileage reimbursement rates the same for any given activity?
What are the specific requirements for tracking, reporting, and calculating mileage rates?
What is the need for a mileage log in the first place?
Tracking mileage for your company and following the proper IRS regulations can save you money come tax season. It can also help substantiate the use of company vehicles by employees to avoid tax deductions and can allow you to take care of reimbursements as businesses expenses.
We have tailor-made this resource for business people, employers, employees, and those who are self-employed. We believe it will be very useful to help you find all the information for your mileage logs, reimbursements, and expense-tracking needs.
With taxes due less than a month away, we thought we’d give you some final tips. If you haven’t filed your taxes already, here are some tips on what you can and cannot deduct.
Less traditional businesses like real estate, freelancing, or rideshare drivers may have unique deductions that they could also be capitalizing on. The key is to maximize deductions while minimizing tax exposure.
For many, the challenge is that they are not aware of what deductions they qualify for. They also might not know how exactly to take them. We’ll look at some common deductions and general recommendations on how to take advantage of them.
It’s important to note that you should consult your tax advisor or CPA for questions on your specific tax situation.
Deductions for Real Estate
You will most likely be subject to property taxes if you own fixed property, either as a homeowner, landowner, or owner of an office building. In most cases, state and local governments levy property taxes based on the property’s value.
These taxes are usually deductible on federal tax returns and can lessen your tax burden. Entrepreneurs should stay updated about caps associated with real estate tax deductions due to the Tax Cuts and Jobs Act of 2017.
If you don’t own any property but paid any real estate taxes as an “equitable” owner, you may be able to deduct real estate taxes paid on that property. An equitable owner is one who has the economic benefit and burdens of ownership.
If Airbnb hosts paid taxes on a given property, they could deduct the percentage of the space used as a rental on Schedule E of their tax returns. Itemization of personal taxes may include the ability to deduct the remaining part of their property tax paid on Schedule A.
Deductions for Home Office
COVID-19 has forced many companies to require their employees to work from home. If you’re one of the thousands who have turned a room in their home into an office, you can take the home office deduction.
Individuals working out of a home office dedicated only to their business can deduct a part of their home expenses. You can take a $5 per square foot deduction for each square foot of their home used for business purposes, up to 300 square feet.
Or, you can track home expenses, such as real estate taxes, repairs, maintenance, etc., and take a part of those expenses as a deduction. Expenses that only benefit the home office are 100% deductible as a business expense.
Deductions for Sole Proprietors
Businesses set up as sole proprietorships are easy to set up and maintain. The only thing a sole proprietor needs to do to begin work is to start working. Despite its simple structure, there are some disadvantages.
For one, the individual is liable for business issues rather than having the protection of a corporation. Also, the sole proprietor pays taxes at the personal income rate.
Furthermore, the sole proprietor has to pay extra self-employment tax, such as Social Security and Medicare. The Tax Cuts and Jobs Act of 2017 allows a business income deduction to lower the tax burden.
That deduction can be up to 20% after deducting business expenses dependent on the business nature and taxable income. One benefit of being self-employed is that you only have to file a single return. You won’t need to file separate personal and business returns.
Deductions for Independent Contractors
Whether the business is a sole proprietorship or a corporation, independent contractors should follow the appropriate tax guidelines. Deductions for sole proprietors are outlined above. For others, it will depend on whether the business is set up as a corporation, LLC, or partnership.
If you are hiring independent contractors, it’s suggested you request they complete a W-9 to ensure you have the necessary information to issue a 1099 at the end of the year. You can deduct payments to independent contractors in several different ways depending on the nature of the work.
This may include different lines of your Schedule C or your Schedule E. For example, you can deduct payments made to an accountant on line 17 of your Schedule C and payments that were made to a graphic designer on line 11.
Meal and Per Diem Deductions
The per diem rate is a fixed amount paid to an employee or individual to compensate for expenses incurred while traveling on business. This is used rather than tracking specific or actual expenses incurred.
For employees of companies, the per diem can include meals, lodging, and incidentals. For sole proprietors and the self-employed, the per diem only applies to meal expenses and incidentals, not traveling expenses such as lodging.
This means that you must still keep records for those other expenses. It’s also worth noting that the per diem rate must be multiplied by 50% for each day. An exception would be actual travel days where the per diem can be multiplied by 75% of the rate.
The per diem for sole proprietors and the self-employed varies, depending on the location and sometimes the industry. For example, the standard per diem for most states is $96 for 2022. The per diem can be much higher for high-cost areas, such as $298 for New York City, $302 for San Francisco, and $256 for Washington, D.C.
Deductions for Mileage
The IRS provides a mileage deduction rate for companies and individuals who use their vehicles for work. For individuals such as freelancers, rideshare drivers, and sole proprietors, the IRS standard mileage rate might be easier to use than tracking every expense associated with your automobile.
While there are many deductions available to entrepreneurs, the IRS does not allow certain expenses as deductions. For example, any illegal expenses, fines, penalties to a government agency, lobbying expenses, and certain business assets such as cars or equipment are not deductible.
There are a variety of deductions available for those working outside the more traditional employer-employee relationship. We recommend that you consult with your tax advisor or CPA to ensure compliance with all applicable tax requirements.
Conclusion
Whether you’re an enterprise-scale corporation or a small business needing to track their team’s mileage, using an automatic mileage tracker app will save you thousands of dollars and countless hours of labor.
Why Combine Fleet Management With A Mileage Tracker?
Today, we’re going to explore how fleet management and company mileage and expense tracking solutions can help those working in fleet management operate more efficiently. In recent years, both categories have emerged, offering those running a vehicle fleet much better visibility as to how to optimise their logistics.
Here are some common elements those in fleet management need to manage:
Location tracking: Where their fleet is at any given time
Route optimisation: Ensuring drivers are taking the shortest and most efficient route possible
Tax compliance: Ensuring records are accurate
Digital transformation: Reducing the emphasis on manual or paper-based processes
Fraud reduction: Ensuring that drivers are not making fraudulent claims, whether inadvertent or otherwise
Given the digital trails being left by drivers, it is now possible for companies to provide insights into the hidden cost of the above. What has emerged is that the above compounds with costs escalating significantly based on fleet size and the typical number of miles undertaken annually.
Read on to learn how the ROI on an effective fleet management and mileage and expense tracking programme far outweigh the cost.
Mileage and Expense Tracking
A mileage and expense tracking solution is an integral part of a fleet management system. Whether the company supplies a fuel card or reimburses the vehicle’s users, a mileage app will result in significant cost and time savings. After all, a mileage tracker is not just for tracking miles – it can provide an array of information to manage a fleet more efficiently.
Advantages of a Mileage and Expense Tracker
Compliance:HMRC compliance (UK) as all journeys are tracked with accurate mileage to the decimal point.
Tax Management: Designed to easily identify personal trips vs. business trips, and to prevent possible benefit-in-kind administration and costs.
Route Optimisation: Optimise mileage routes – fewer miles translates into cost reductions, as well as less wear and tear and CO2 emissions.
Time Optimisation: More efficient planning results in better utilisation of an employee’s time, including identifying idle time.
Fraud Prevention: The data available from a mileage and expense tracker makes it easier to tackle fraud as well as acting as an added incentive.
Financial Reporting: You get accurate KPIs including miles per gallon and costs per journey.
Driver Management: Monitor driver’s behaviour faults such as harsh acceleration, heavy braking, and speeding.
Flexible: Uses Advisory Fuel Rates for employee reimbursement or deduction for private use.
Expense Management: Receipts uploaded including fuel, parking, and other expenses.
Administration: Reduction in administration time as numerous reports available to the fleet management and finance team including a personal trips report.
TripLog can provide a mileage tracker which can be easily added to fleet tracking software.
API and Integrations
TripLog’s powerful web API provides back-end server-to-server function calls to search, retrieve, create, and modify user data. It is available to enterprise and business users.
Tracking fleets of cars and tracking those cars’ mileage is something that would make sense to go hand in hand, but many companies either use outdated and inaccurate methods such as pen-and-paper, or aren’t tracking mileage at all. Combining fleet management software with a full-featured mileage tracker app is an easy way to save time, money, and headaches.
About Triplog
TripLog is a comprehensive mileage and expense reimbursement platform that increases employee productivity and accountability, resulting in significant cost savings to employee mileage reimbursement programs.
With over 500,000 downloads, TripLog is trusted by Fortune 100 companies and users worldwide. Companies can see how much more they can earn with our mileage reimbursement savings calculator.
In addition to its powerful mileage and expense tracking capabilities, TripLog offers employee schedule tracking and timesheets. TripLog can be downloaded on iOS or Android, or schedule a free live web demo today.
About the Author
Parteek Singh is the Director of Marketing and Business Development at TripLog. He is a data-driven decision maker with significant experience with tech startups from ideation to build out.
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In a 2016 Global Fraud Study conducted by the Association of Certified Fraud Examiners, the cost of fraud recorded by participants was $6.3 billion USD. Even by their estimates, the total global cost of fraud may be significantly higher, maybe even hundreds of times higher.
Fraud has serious consequences for the bottom lines of companies big and small. In this study, certified fraud examiners estimated that a typical organization loses about 5% of revenue due to fraud.
Though many situations of fraud are intentional, many employees commit fraud without even knowing. Fraud doesn’t necessarily point to criminal behavior, but it does have huge real-world consequences for organizations whether or not the fraud was deliberate.
It’s important to plan for fraud and recognize it when or before it occurs. This article is about the primary ways a business can experience fraud, who commits fraud, and how to prevent fraud in business.
Who Commits Business Fraud?
Fraud can be committed by any member of an organization. Employees and managers are most likely to commit fraud, but their lack of access to larger funds in the business restricts the cost of their fraud.
While owners and executives are much less likely to commit fraud (partially because employees comprise more of a typical company), the cost of their schemes is usually much higher due to their access to large amounts of money within the organization and their ability to evade or override anti-fraud prevention methods that other employees wouldn’t have access to.
It isn’t much of a surprise that employees from the accounting department are most likely to commit fraud in a company. These employees have continuous access to financial statements and can easily falsify numbers along the way.
What Are the Types of Fraud in Business?
Though there are a wide range of types of fraud in business, there are three primary classifications in regards to occupational fraud.
There are 3 classifications for business fraud:
Corruption
Asset Misappropriation
Financial Statement Fraud
What is Corruption Fraud?
Corruption includes conflicts of interest, bribery, illegal gratuities, and economic extortion. This type of fraud is committed by those in positions of power. Examples of corruption fraud could be purchasing or sales schemes.
What is Asset Misappropriation?
Asset misappropriation typically involves cash, inventory, or property. This type of fraud can be committed at nearly every level of an organization.
This can range from stealing cash receipts to payroll schemes and mileage reimbursement schemes. Asset misappropriation is the most common type of fraud in business, but usually costs the least of all frauds in expenses to employers.
What is Financial Statement Fraud?
Financial statement fraud consists of under or overstating things such as revenues, asset valuations, or cheating on mileage tracking reports.
This type of fraud can be committed at every level of a company. Financial statement fraud is the least common type of fraud but usually costs the most to employers.
The Most Common Types of Employee Expense Fraud and How to Prevent Them
Employees are the most likely individuals in an organization to commit fraud. These frauds are usually small amounts through expense reports, but they can occur for a period of time, which adds up in the long run.
The Most Common Ways Employees Cheat On Expense Reports Are:
Submitting personal expenses as business expenses
False mileage reporting
Exaggerating gratuity/tips
Submitting more than budgeted
Receipts for canceled or returned items
Submitting Personal Expenses as Business Expenses
A simple way to commit fraud is by claiming personal expenses as business expenses. This could include meals, fuel, vacations or trips, and much, much more.
TripLog recommendation: Require employees to submit expense reports that explain every charge with receipts.
Mileage Fraud
Another simple method of committing fraud is cheating on mileage tracking submissions. A small addition is unlikely to set off any alarm bells and may be enticing for employees.
Ditch manual mileage logs and use an automatic mileage tracker app. A GPS mileage tracking tool like TripLog will give you accurate submissions every time, reducing your potential losses, cutting down the number of employee hours spent tracking and submitting mileage, and giving you peace of mind.
When employees are reimbursed for meals, a simple technique to skim a little extra out of the budget is by lying about tip amounts.
While the meal can be accounted for through receipts, gratuity is not always recorded. This leaves a vulnerability in the system where employees could lie about the amount given in tips to receive more in reimbursement.
TripLog recommendation: Require employees to use a credit/debit card and request receipts for every meal. Using a card every time will ensure the transaction can be tracked, reported, and checked in case of discrepancies.
Submitting More Than Budgeted
When employees are given budgets to spend on various items such as meals or travel, oftentimes management doesn’t notice when employees have exceeded their allotted amounts.
This can go unnoticed for a long period of time, leading to many small charges adding up to a large amount of money. This becomes difficult to fix when many charges pile up.
TripLog recommendation: Accountants should double-check numbers often. Make it a requirement to review budgets frequently to make sure every employee is reporting honestly.
Additional Tips for Identifying & Preventing Fraud in Business
Tip Hotlines
According to the Association of Certified Fraud Examiners, the most common detection method for organizations experiencing fraud are tips from concerned individuals. Therefore, the single most impactful method of identifying fraud within an organization is providing an anonymous hotline to report suspicious activity to the organization.
Individuals who know about fraud may not want to come forward for various reasons, including friendships, reputation, not being taken seriously, and reprimand. Whistleblowers may even be outside the organization entirely, making tipping off anyone within more difficult.
Setting up an anonymous hotline for reporting fraud removes many of the barriers to reporting and allows for more honesty in tips.
Company Debit Cards
If your organization budgets funds for employee use such as for meals or travel, a straightforward approach to preventing fraud is by providing debit cards to employees. If employees are only given the amount they are budgeted, they can’t spend more than is allotted.
This also allows management to review every charge and check for discrepancies. This doesn’t necessarily control all types of fraud, but it does allow much more oversight.
Conclusion
A business will always be exposed to some risk of fraud. Humans are prone to error and could be enticed to cheat their company out of money.
Every employee added to payroll is another liability to control for. That’s why TripLog offers an expense and mileage tracker app that saves you time, money, and protects your business from fraud.
Automated mileage tracking and reporting cuts out any inaccuracies and helps every business run more smoothly. Download the app today on iOS or Android to begin your journey toward more accurate expense tracking, or visit our pricing page to get started.
A massive financial issue that companies, employees, rideshare drivers, contractors, entrepreneurs, and freelancers should be keeping an eye on, is the IRS mileage rate for 2021. While there is no published version of the said rate for 2021 yet (57.5 cents for 2020), the yearly mileage reimbursement rate comes in quite handy for organizations, as it helps them determine the best way to reimburse employees.
Determining the mileage rate is also a great way for people to find out which mileage rate to add when filing taxes. For those who do not know, the mileage rate reimbursement rates were never supposed to be a company’s reimbursement rate by the IRS.
On the contrary, they came into existence to serve the role of a cap for organizations. Simply said, any money given to employees over this rate essentially becomes taxable income.
For steering clear of this problem, employers can recompensate around the rate per mile. For example, the rate during 2019, used to be around 58 cents for every mile.
Therefore, sole proprietors would be wise to utilize the same rate whenever calculating the expenses of running small businesses, which may also include driving for a transportation company like Uber.
Are you preparing for the 2021s reimbursement rate? If the answer is yes, consider keeping the following things in mind.
The IRS Mileage Rate for 2021
In case you do not know about the IRS mileage deduction rate, familiarizing yourself could go a long way. There is a high possibility that you know it by another name. However, the rate will essentially be the biggest amount an organization can provide its workers per mile, without paying the reimbursement’s taxes.
Determining Mileage Rates – What are the Indicators
Several indicators can help determine the right mileage rates. Let us discuss some of the most common ones that companies resort to.
Vehicle Maintenance and Costs
After the downsizing and bankruptcy of most rental car businesses, the prices for used vehicles reduced considerably. Also, it is worth keeping in mind that the rates of used automobiles do not impact mileage rates.
That said, with the low new vehicle inventory recently, the prices for used cars are slowly increasing. This shows that the rates of new automobiles will not face a massive impact.
According to some reputable valuations, the prices for new vehicles increased only by 2.5 percent during September 2020. After that, however, they remained mostly flat, which indicated supply-related challenges, among other issues.
There is no denying that the automobile maintenance industry experienced a massive decline during the lockdown, it is slowly but surely bouncing back and may raise prices to ensure they catch back up to their growth targets.
Insurance Rates
The seemingly everlasting increase of insurance rates is something that everyone knew would happen with the passage of time. However, things took an unexpected turn when those rates finally began to drop, for obvious reasons.
The amount of people traveling reduced significantly. This meant that traffic would be lower, drivers would be less distracted, and there will be a smaller number of accidents. That said, the slight decrease in insurance rates will not play a massive role when deciding the mileage rate for 2021.
Fuel Trends
It would be safe to say that oil experienced arguably the rockiest year compared to others. Sure, the news was not as widespread as other events, mainly because it got buried under other headlines.
Nevertheless, there were several contributors that led to this rocky season, and one of them was the pandemic. It impacted the economy globally, significantly decreasing business and personal mileage.
However, problems were brewing long before the pandemic as OPEC+ AND Russia were in a long production standoff without any clear winner. According to speculations, the reason for this standoff was to capture market shares.
However, it was likely from the perspective of supply and demand. There was a lot of oil, but the need was surprisingly low. What’s more, business mileage activity still remains lower than the pre-pandemic levels, as we head in the fourth quarter and the same foes for fuel demands.
Although the oil surplus and the pandemic were 2020s atypical assets, their impacts could carry onto 2021 and be massive determinants for the IRS mileage rates. There seems to be no end to the pandemic in the United States, or anywhere else for that matter.
In addition, several indicators suggest that business activity may not come back to where it was before the pandemic until summer 2021. Since industries like tourism and travel have a massive impact on fuel consumption, it may take some time to match the previous year’s oil surplus.
Predicted IRS Mileage Rates for 2021
Although we are a few months away from the official announcement, everything that happened during this year points towards a decrease. However, there is nothing to indicate whether the decrease will be minimal or substantial so far.
Getting Ready for the IRS Mileage Rate 2021 – What Can Your Company Do
Does your organization reimburse employees? If the answer is yes, reconsidering that approach may be a wise choice for the following reasons:
Maintenance and fuel costs are specific to areas. Therefore, reimbursing every employee at the same rates, or giving them similar lump sums would be wasteful and quite unfair
The correct cents per mile reimbursements could be lesser than the IRS’ mileage rate, and that is how it should be. Why? Because the mileage rate provided by IRS is mostly there as a guide. Therefore, if you reimburse above the rate and you will have to pay taxes for the reimbursements. It would be best if you considered a mileage rate beneficial for your company and is employees
Using the Internal Revenue Service mileage rate for reimbursements tends to result in high reimbursements for high mileage drivers and low reimbursements for low mileage drivers. Try searching for a fair option for each employee as it may also offer effective cost control.
Among every vehicle program option, the FAVR (fixed and variable rate) reimbursement could be the perfect fit as it accounts for variable and fixed vehicle costs.
The upcoming IRS mileage deduction rate for 2021 is arguably the most anticipated one due to the events that happened in 2020. Needless to say, organizations should prepare themselves to weather the storm, making sure they can operate without too much hassle.
More organizations are realizing the need to automate as much of their operation as possible. Property management firms are no different, as employees are often required to drive from location to location for a variety of reasons.
Precise tracking each trip can become a challenge, whether the firm owns and operates a fleet of vehicles or allows staff to be reimbursed for using their own vehicles. While many property management firms can do very well and have robust balance sheets, improper mileage tracking can eat away at profits and turn healthy margins into unprofitable enterprises.
To help mitigate unnecessary costs and ensure all operational deductions are realized, here are 5 tips that property management firms can incorporate today to save their money and time.
Mileage Tracking Employees
With an effective company mileage tracker like TripLog, property management companies can track the mileage employees drive when going from property to property. Whether an inspector is assessing damage at a managed office location or maintenance staff is ensuring upkeep at a residence, keeping track of mileage for each employee is critically important.
Besides managing other income and expenses for the property, determining how employees spend their time behind the wheel helps property management companies better manage overall costs and employee time.
Mileage Tracking Trips
In addition to tracking employee activity, tracking individual trips with real-time fleet location tracking makes TripLog a valuable tool for any property management company.
Company administrators can determine and set criteria for groups of employees or individual staff. Approving certain types of trips for reimbursement and/or tax deductions will also help keep a lid on costs while maintaining IRS compliance.
Collecting Reports
TripLog facilitates the collection and compilation of data from individual trips and employee activity by integrating it with existing business systems. This integration requires no additional processes or training.
TripLog’s Web API capability allows for seamless sharing of information with solutions such as Concur, QuickBooks Online, and Xero. This, in turn, saves additional time and money by removing manual collection or input of daily employee or fleet trip information.
In addition, TripLog allows for customized reports designed to help admins and executives review mileage expenses and make more informed operational decisions.
Approving Mileage Logs
With the powerful TripLog web dashboard, administrators can manage all employee and fleet mileage tracking and approvals from a central hub. The dashboard also allows for automatic approval of mileage logs based on company policies and other predetermined criteria.
Administrators can increase or decrease criteria as well as easily add or remove employees. Nothing gets paid or processed without executive or administration approval.
IRS Compliance
Property management firms must often manage multiple moving parts during the course of running their operation each day. TripLog allows them to streamline one of the more important aspects of their business: mileage reimbursement.
Staff can download the easy-to-use app today on iOS or Android and start tracking their mileage and related business expenses more accurately. Management can centrally manage their fleets and individual drivers with an easy-to-use dashboard that helps reduce cost and wasted time.
Managing a vehicle fleet isn’t easy, from dealing with everyday problems to ensuring the logistical needs of the business are being met, especially in a period of growth. The company may not be able to run the fleet at its optimum level from a cost and tax perspective, and risks non-compliance by not keeping proper records or paying the right amount of tax.
Today, we’re going to look at a business mileage tracking case study in the UK. HMRC views mileage as a high-risk area and would evaluate how the company deals with business and personal mileage by reviewing its systems, processes, and controls.
The company would be expected to substantiate any mileage claimed. For example, date, where from, location, and why the travel was taken.
This is onerous and takes time from both an employee’s and employer’s point of view. A manual system is inaccurate, inefficient, and time-consuming for the company as a whole.
Mileage Tracking Case Study in the UK
Supermarket Ltd has a fleet of 500 lorries where mileage is paid by fuel cards. It has 500 company cars paid by fuel cards with different engine sizes and fuel (electric/petrol/diesel), and on average reimburses 500 employees for business mileage on a monthly basis, and relies on employees to mark personal travel, which many fail to do.
Currently, it doesn’t require employees to keep a log of business miles and reimburses employees who have personal cars through spreadsheets. It also has come to the finance department’s attention that personal car owners may have overclaimed when submitting expense claims.
It is also concerning when company car owners use their cars for personal use but don’t declare it, which may result in additional work as well as an increase in tax for the employee and employer. The company cannot cope with the volume of 1500 vehicles, especially with the monthly VAT submissions and dealing with different engine sizes and fuel types as the advisory fuel rates change monthly.
In addition, the P11d process is cumbersome and a lot of the time is trying to find out information on car value, engine size, etc. Furthermore, the company’s management team is seeing increased fines for speeding and accidents. The company has outlined these issues below.
2) Manually claiming VAT on mileage based on advisory fuel rates with added complexity as VAT claims depend on engine size and type of fuel, as well as the month, where the advisory fuel rates on fuel may change.
There is also the risk of claiming VAT on private fuel and ending up with a scale charge. Employees send in fuel receipts, which means more paperwork.
3) They run the risk of having the wrong mileage rate being used which will result in increased costs as employees may claim, for instance, 0.45p, when the correct rate should be 0.25p. If they pay more than the Approved Mileage Allowance Payment rate, then it becomes taxable on the P11d.
4) Unable to determine private journeys, therefore increasing costs and risk of fuel benefit charges on the employee. Employees may be going on private trips on company’s time, which is a double whammy.
5) Possible risk of fraud from those with personal vehicles by claiming for fictitious journeys or claiming additional miles. Rounding up trips seems common, and inadvertent claims for private trips like going from home to a contracted workplace or stopping en-route for private activities can also occur.
6) No KPI data available, like cost per mile or analyzing data on route optimization.
Company Decides to Install Business Mileage Tracking Device
1) Mileage is captured automatically to and from, as well as the number of miles. Employees can add information and mark their private journeys as needed. It can also upload fuel receipts.
2) Company deducts personal mileage from the salary of the employee so there is no fuel benefit or VAT scale charge.
3) Facilitates VAT claims as the finance department can download a report with the VAT calculated on fuel base, amount of fuel used, engine size, and month.
4) Data, when available, can check for obvious errors and fraud. For instance, home to a place of work claims or private trips.
5) KPI data available to reduce costs. Able to monitor the length of journeys and miles, thereby reducing costs by advising the driver of the optimum routes to take in the future. Cost per mile analysis, including why the journey is taking longer or costing too much.
6) Track vehicles and help logistics, as well as reduce time for deliveries. Improved utilization of employee time.
7) Analyze driver’s mileage consumption and encourage better driving to lower fuel costs.
8) Monitor driver’s behaviors, including speeding. Speeding can increase the likelihood of accidents and fines.
9) Lower fuel costs will result in reduced CO2 emissions.
10) VAT receipts are stored electronically rather than dealing with thousands of receipts.
2) Working out VAT element manually including checking VAT Receipts 3) Personal Travel Reimbursement
4) P11d submissions including Fuel Benefit Charge
5) Improved utilisation of company time (personal travel/idle time)
Average 5 days a month for 1 Finance Staff: £200 * 5 = £1000 per month. Annual = £12,000 Average 2 day a month for Management: £500 per month Annual = £6,000
Employees spending two days a month equivalent logging business mileage = £250 * 2 = £500 : Annual £6000
Employee utilising company time for personal trips: 1 day a month = £250 * 1 = £250: Annual = £3000
Total Savings: £2,500,000
Automated Mileage Tracking System
A company mileage tracking solution system is essential for any business. The possible savings for a large company are significant and definitely cannot be ignored.
In the above case study, which is based on conservative estimates, the company could save a whopping £8.5m. Studies have shown that 47% of employees overclaim on business mileage, we have just taken a figure of 10%.
For lorries, we have only taken 5% in savings. They are unlikely to have any personal travel expenses, but the main savings will be through route optimizations, driving behavior changes, and proper employee utilizations.
For company cars, we have taken 5% savings as the likelihood of private travel, which is considered to be high. Again, route optimizations and driving behavior changes will be important factors in lowering costs.
Main Benefits Summary
1) Innovative approach and reduced expense cycle. Mileage data can be integrated into the expense claim system and paid accordingly.
Personal mileage cost recovery can be integrated with payroll. Mileage can be automatically submitted to the accounts software by the press of a button.
2) Save both employee and employer administrative time.
3) Lower fuel costs.
4) Reduction in fraud.
5) Recovery of personal mileage.
6) Data availability and analysis with KPIs.
7) Lower CO2 emissions.
8) Improved driver behavior and reduced risk of fines and accidents.
9) Accurate VAT returns and maximized claims.
10) HMRC compliant and less likely to result in extensive audits and penalties.
11) Tracking of vehicles to increase efficiency.
12) Reduced taxes; for instance, the VAT scale charge.
13) Better reporting; for instance, VAT on fuel on one singular report, rather than dealing with having to collate multiple spreadsheets. There are other useful reports for personal mileage recovery and for P11d filing.
14) Save paper/postage, as VAT receipts held electronically.
Effective automation with TripLog can cut down the costs that usually aren’t visible on a balance sheet, be it the time cost of manually logging and processing mileage logs or the costs of accounting for manual processes. With one-click submission and easy approval, TripLog and ADP Workforce Now make mileage reimbursement a breeze.
TripLog is a mileage tracking mobile app and cloud solution that ensures accuracy, automation, and transparency. With TripLog, small to mid-size companies, as well as larger enterprise organizations, can have a smart mileage solution at their fingertips.
Increase Employee Accountability
Employee accountability is just one reason why automating your mileage tracking is so important. Time saving is key.
Productive time shouldn’t be spent manually logging and processing mileage logs. It’s why making sure your team is utilizing automated tracking software that connects with your payroll system is an absolute necessity, as it can significantly cut down on mileage reimbursement costs.
Along with time savings, over and under reimbursements can cost businesses thousands by paying for over-reported mileage or having to reconcile paper logs at the end of any given pay period.
To provide a complete solution, TripLog integrates with payroll processing leaders such as ADP. ADP Workforce Now offers a complete human capital management (HCM) platform that benefits owners, employees, and HR pros for small to midsize companies.
Using an HR and payroll provider like ADP makes a lot of sense, and they offer solutions that fit a variety of different business sizes and types. TripLog’s integration with ADP Workforce Now helps make payroll much simpler by exporting automated mileage expense logs directly into ADP.
Just review mileage expenses, approve or edit them as necessary right in TripLog, and one button click later, ADP will have the data needed to run payroll. TripLog tracks each trip automatically and allows for easy expense capture and classification so you don’t have to waste time on manual mileage logs for reimbursement.
Connect TripLog to ADP Workforce Now Simply and Quickly
After subscribing to TripLog Mileage for ADP Workforce Now from the ADP Marketplace, ADP customers can easily access TripLog the solution right through their portal using a single sign-on (SSO) with their ADP login credentials). To make things simple, ADP customers can even start a free trial right from ADP Marketplace.
Alternatively, existing TripLog customers who also are implementing ADP Workforce Now can simply purchase the TripLog Connector data connector for ADP Workforce Now, which enables the integration’s secure data-sharing between the two solutions. To learn more about TripLog’s integrations with connector and integration with ADP Workforce Now by ADP, visit the ADP Page or visit the ADP Marketplace.
