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How to easily set up mileage reimbursement for your company

Ted He

Ted He

Founder & CEO at TripLog
mileage reimbursement plan triplog

Companies fighting for a competitive edge in the marketplace will face some obstacles. These obstacles, or challenges, may include finding the right marketing message, hiring the right people and/or keeping company expenses down. One area of particular importance is the mileage expenses associated with operating an organization. Companies need to take every opportunity to decrease their tax exposure through mileage reimbursement and reduce the cost of doing business.

Why you need a mileage reimbursement plan in your company

Whether employees travel across town to pick up office supplies or to the next state to make a client visit, keeping track of – and reimbursing for – mileage expenses is very important. The primary reason for doing this is two-fold for the organization. First, it helps attract top talent by ensuring the company will make good on any company-related expenses incurred by the employee. Second, it allows the company to reduce their tax exposure by identifying valid business expenses that they can write off

Implementing a mileage reimbursement plan

Implementing a mileage reimbursement program corporate-wide is necessary in all cases where employees incur some mileage related business expenses on behalf of the company. To take advantage of the benefits of implementing such a program, a company must ensure certain things are in place to meet the IRS requirements. An accountable plan is one such necessity. An accountable plan outlines reimbursement and expense allowance for employees. If a company does not have an accountable plan, the IRS will view any expense reimbursement to employees as wages subject to tax withholding.
When setting up an accountable plan, companies must ensure it meets three specific criteria:

  1. The expense incurred by the employee must be business-related only.
  2. The employee must provide a timely and detailed expense report.
  3. The employee must return any payments that were more than the reimbursement within a reasonable timeframe.

When implementing a mileage reimbursement arrangement, companies should understand the guidelines set forth by the IRS. For example, there are specific IRS mileage rates that companies may use for reference as the reimbursement rate for their plan. For 2019, that rate is 58 cents per mile for business miles driven. Also, miles driven for medical or moving purposes is 20 cents per mile and miles driven for charitable reasons equates to 14 cents per mile.

The employee’s responsibility

Once an employer implements a mileage plan, employees must maintain business mileage records and submit them at regular intervals. Employees must also be mindful that any mileage mentioned must be relevant in conducting business for the company. That can take the form of visiting clients, shopping for office supplies, making bank deposits for business or driving to a conference.
Activities not associated with business include commuting to and from a normal work location. Traveling to a temporary job site away from a regular work location is reimbursable.

Reimbursement vs allowance

Because every business is different, one size may not fit all. It’s worth pointing out the major differences in reimbursing employees for realized mileage expenses vs providing an allowance.

When companies provide an allowance, employees receive their funds beforehand and can use it for travel without having to wait. This method is often associated with fraud and unintentional inaccuracies. Requiring employees to submit mileage expense reports can reduce the instances of fraud and inaccuracy, but involves more paperwork. For many companies, reducing fraud and keeping a tighter rein on expenses is a more attractive option. Choosing mileage reimbursement has its disadvantages, but companies can leverage technology that automates the entire process.

Enterprise solution solves company reimbursement issues

Effective enterprise mileage tracking and reimbursement solutions, such as TripLog, can cut the time and effort needed to put in place a mileage reimbursement plan. TripLog is a mileage tracking mobile app and cloud solution that ensures accuracy, automation, ease of use and transparency.
With TripLog, small to mid-size companies, as well as larger enterprise organizations, can have a smart mileage solution at their fingertips.

TripLog’s intuitive dashboard for enterprise administrators can manage approvals, supervisors, mileage and more. With the enterprise solution, companies can easily set up their accountable plan and mileage reimbursement policy via the online dashboard. In turn, employees can use the smartphone app and begin automating their mileage tracking and submission activities at their end.

For those employees not too tech-savvy, TripLog’s easy-to-use app allows for many set-and-forget auto start options. This allows for simplified use and mileage submission right from the app. More features in the TripLog app include:
Google Maps Distance – facilitates the use of Google Maps’ point-to-point distance reducing overreporting.

Address Book – keeps better track of many visits for the same customer. It also allows for address sharing as well as the date and duration tracking of each visit.
HIPAA Compliance – for healthcare organizations it encrypts protected health information (PHI) and identifiable information (PII) in a secure environment.
Data Privacy – allows employees to hide personal trips from manager view and hide trips until ready for submission.

Job Performance Monitoring – enables job site time tracking reports, providing insight on time spent on each job.
Real-time Location Monitoring – helps companies keep track of where drivers are at a given moment, including a map view of daily or weekly travel routes.
OCR Capability – simplifies expense tracking and submission by taking a photo of receipts or odometer readings – right from the dashboard. The OCR technology converts the image into data that is reviewable and ready to submit, saving valuable time by avoiding manual input.
Address Book – keeps better track of many visits for the same customer. It also allows for address sharing as well as the date and duration tracking of each visit.
HIPAA Compliance – for healthcare organizations it encrypts protected health information (PHI) and identifiable information (PII) in a secure environment.
Data Privacy – allows employees to hide personal trips from manager view and hide trips until ready for submission.
Job Performance Monitoring – enables job site time tracking reports, providing insight on time spent on each job.
Real-time Location Monitoring – helps companies keep track of where drivers are at a given moment, including a map view of daily or weekly travel routes.
OCR Capability – simplifies expense tracking and submission by taking a photo of receipts or odometer readings – right from the dashboard. The OCR technology converts the image into data that is reviewable and ready to submit, saving valuable time by avoiding manual input.

There are more ways companies benefit from using the TripLog mileage reimbursement mobile app. TripLog makes it easy for companies to create and put in place an accountable plan. Companies realize greater accuracy and transparency. Complete and total control via the comprehensive dashboard allows company administrators to tailor mileage reimbursement details whenever IRS requirements or company policies change.

TripLog gives companies a competitive advantage by helping them make mileage tracking a more efficient, manageable and transparent process.

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TripLog offers mobile app and cloud mileage tracking and reporting solution. In addition, we offer optional hardware devices with enhanced features.