Expense tracking is an important key to success for any business. Business expenses can easily get out of hand and eat into valuable profits.
A major expense for businesses with mobile employees is mileage. If you want to take a tax deduction on your mileage or receive reimbursement from your employer, tracking all of your mileage is an absolute must.
The most common – and most efficient – method of tracking mileage is with a modern mileage tracker app. To see how much your business could be saving, check out our mileage reimbursement savings calculator.
Here are a few reasons why your small business needs to be tracking its mileage.
Why Small Businesses Should Track Their Mileage: Lost Revenue
According to a recent survey conducted by Chrome River, U.S. businesses lose more than $2.8 billion due to expense fraud each year.
Related: 10 Most Common Tax Deductions For Small Business
The research indicates that more than 6% of employees submit incorrect expense claims. For those who admit to not being completely honest, there is as much as $2,448, on average, in fraudulent expenses submitted each year.
It’s easy for staff to fudge the numbers when submitting expense reports for certain things, including their mileage. For instance, if your team uses pen-and-paper mileage logs, they can easily inflate their mileage and it can be very difficult to tell.
In fact, TripLog found that drivers overinflate their mileage by 27%. Thankfully, the TripLog app cross-references your team’s mileage with Google Maps, ensuring accurate reports.
Regardless of whether these errors are intentional or not, those costs add up. Getting a better hold of your mileage expenses can mean the difference between a healthy balance sheet and edging closer to financial calamity.
With that said, just tracking your team’s mileage isn’t enough. Your business will also need a reliable and efficient method of submission and approval.
Why Small Businesses Should Track Their Mileage: Lost Productivity
Not only is fraud an enemy of small businesses, but also losses in productivity. Many employees who use their personal vehicles for work keep track of their mileage by hand.
TripLog found that each manual entry takes around 2 minutes to complete. Over the hundreds or even thousands of trips many drivers take over the course of a year, these minutes add up to countless hours of lost productivity.
Far too many hours are spent every year manually checking distance and odometer readings. While companies want employees to be honest and accurate, it can be very time-consuming to get right.
Automatic modern mileage tracker apps like TripLog cut down those minutes and hours to just seconds. With several different set-and-forget mileage tracking options, the TripLog app automatically tracks your team’s mileage when they start driving and stops tracking after they park.
Why Small Businesses Should Track Their Mileage: Missing Out On IRS Deductions
Besides losing money due to fraud and inefficiency, many small businesses are not taking advantage of IRS deductions designed to reduce a business’s tax exposure. To set up a mileage reimbursement plan for your team, businesses should incorporate an accountable plan.
Related: Common Tax Deductions To Plan For in 2022
You will need an accountable plan if you want to use the IRS standard mileage rate. Without a mileage reimbursement system in place, businesses could be leaving significant amounts of revenue on the table.
Either the money you give to your employees will be viewed as compensation, which is subject to being taxed, or as reimbursement, which is typically not taxable.
Small businesses can track their mileage expenses to take advantage of key tax deductions. They can do so more efficiently by using software that makes the process accurate and automatic.
There are several benefits to using software designed to track mileage expenses. First, the right kind of mileage software will track mileage down to the last mile. No more fudging on numbers to inflate the expense report. A good mileage tracking solution, such as TripLog, provides OCR-enabled mileage tracking.
Let TripLog Assist With Your Small Business Mileage Tracking
TripLog’s OCR receipt capture technology also helps with company expense tracking. Furthermore, solutions like TripLog can suggest trip mapping for the shortest route as well as help businesses track where the employee is during their business journey.
Expenses are an inevitability of any business, regardless of size. Companies should provide tools to help employees track and submit mileage-related expenses. Doing this will help the company save money and use its resources more efficiently.
By using the right tools, companies can curtail the occurrences of fraud and contribute more to their bottom line. To get started saving money and time, schedule a complimentary live web demo with TripLog, or visit our pricing page to get started today.