Your mileage reimbursements are only as accurate as your mileage tracking. Ensure that you’re equipped with the best electronic mileage logbook available.
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. To balance cost control and employee needs, you need an accurate, transparent mileage log – preferably a GPS mileage app. Because employees already carry mobile devices, there's no need to purchase additional equipment to log business mileage.
Logging mileage electronically has become best practice now that mobile apps like mLog can automatically record vehicle travel in real time. The IRS requires that mileage logs be as contemporaneous as possible – not trip reports that rely on error-prone memories.
In the past, many organizations have relied on Microsoft Excel spreadsheets to serve as mileage logbooks. Employees would routinely record their business trip mileage into the company spreadsheet as part of the car reimbursement process. These may be "electronic" logbooks, but they still rely on manual entering of data.
Manual entry of data leaves lots of room for human error. Even using Google Maps to generate trip mileage after the fact leaves room for error. Now the market is filled with tracking devices, GPS apps, and expense systems with mileage capture, leaving the old spreadsheet mileage logs in the dust.
But how do you know which electronic mileage log is right for your organization?
We have designed a 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 is 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 away from using Excel spreadsheets to track mileage in real-time.
In the past, most mileage logbooks 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 form of inaccuracy can plague self-reported mileage logs: mileage buffering. Given the volatile nature of fuel costs and other vehicle expenses, 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 way 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 (which is why the best apps record mileage in real-time but do not report mileage to the company in real-time).
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 an electronic mileage log.