Your mileage reimbursements are only as accurate as your mileage tracking. Ensure that you’re equipped with the best mileage tracker available.
Tracking business mileage in 2020
Reimbursing employees for mileage is a great way to protect them from the costs of operating a vehicle for work – especially now that the tax reform has eliminated the unreimbursed business expense deduction. That’s right – for the 2018–2025 tax years, it is more important than ever for employers to ensure they supply their mobile workforce with an IRS-accountable plan for vehicle reimbursement supported by an IRS-compliant mileage log.
However, in the process of doing right by your employees, it’s important to make sure that your mileage reimbursements do not become cost-prohibitive, as they often do for companies with high-mileage employees. The most important factor in balancing cost control with employee car is an accurate, transparent mileage tracker.
Spreadsheet mileage logs are outdated in 2020
In the past, many organizations have relied on Microsoft Excel spreadsheets to serve as mileage trackers. Employees would routinely record their business trip mileage into the company spreadsheet as part of the car reimbursement process. But now the market is filled with tracking devices, GPS apps, and expense systems with mileage capture. How do you know what’s right for your organization?
We have designed our checklist to help you evaluate both your current mileage log and other options you might be interested in. Given the costly nature of a car reimbursement program, it’s important to choose the mileage tracking method that will be most cost-effective for your organization.
But before using our checklist to help you in this process, it helps to examine why so many organizations are switching from using Excel spreadsheets to track mileage.
Avoiding self-reported mileage tracking
Most mileage tracking used in the past involved the laborious and often inaccurate element of employee-reported data. An employee had to carefully record and calculate distances between stops on a business trip. And often this information had to be entered into more than one system, checked by management, and approved prior to reimbursement.
The fact is, logging mileage into an Excel spreadsheet is no fun. This time-consuming process incentivizes short cuts, such as estimates. Tedious processes also tend to leave room for unwitting mistakes.
Beyond estimates and mistakes another more insidious form of inaccuracy can plague spreadsheets and other self-reported logs: mileage buffering. Given the volatile nature of fuel costs and other expenses associated with operating a vehicle, employees may add a buffer to their mileage to help when expenses increase without an increase in the mileage rate. Over time, this practice can expand beyond a simple mechanism to offset added expenses. Self-reporting leaves few ways for the company to rein in over-reporting.
That’s why today’s automated mileage trackers (mobile apps) are starting to become popular. They offer increased visibility into employee productivity – but they also raise serious privacy concerns.
Tracking business mileage in 2020 – new mileage apps
As times change and options proliferate, you want to make sure your organization adheres to best practices that help control mileage reimbursement costs while protecting employee income and privacy. Our Mileage Tracking Checklist is designed to help you ensure you do right by the company and its employees.
Let us help you evaluate all your options and make the best choice possible when it comes to a 21st-century mileage log.