Using Excel for Your Mileage Log? You Might as Well Use a Chisel and Stone
Roughly half of companies with mobile employees reimburse for mileage rather than pay an allowance. The IRS requires these companies to maintain a mileage log to substantiate business use for reimbursement as well as for company cars. The log can take many formats: paper logs, Excel spreadsheets, time and attendance logs—even GPS mileage applications.
Excel is a popular choice. Microsoft has been the standard business tool for most organizations since 1987. It is an incredibly powerful tool to crunch and calculate numbers and works intuitively store business mileage. However, 30 years later, more innovative and cost-effective options exist. These tools make Excel mileage logs the modern equivalent of a tablet and chisel. So why do so many companies stick with the spreadsheet?
Three reasons companies use Excel for mileage capture:
- It’s a versatile business tool that the company already uses. Why go and get another tool to capture business mileage when you have Excel?
- It’s easy to use. All you have to do is populate data in each cell. It doesn’t take much training to get it right.
- It’s familiar and trusted. “If it ain’t broke, don’t fix it.”
Despite the relative benefits, there are many fundamental problems with using Excel to record and calculate mileage. The problems cost your company time, mileage, and tens of thousands of dollars in productivity losses. The problems far outweigh the perceived benefits.
Three reasons to stop using Excel as your mileage log:
- It’s time-consuming. Using a spreadsheet means unproductive time. Employees typically have to keep an initial record of their travels, often on paper, in addition to the spreadsheet into which they enter their mileage. They likely compile and enter this information on a weekly or monthly basis. Employees are not going to log the trips in real time. After pulling a paper log of addresses, the next step in the process will be calculating the distance or mileage. After the mileage calculation, then comes the final data entry process. That’s a lot of steps—and a lot of unproductive time.
- Employees take short cuts. This time-consuming process can prove mentally exhausting when combined with recording other expenses, compiling sales reports, and attending internal meetings. This busy-ness leads to costly short cuts. Many employees will guess at the mileage between meetings to cut down on the number of steps to log mileage. If employees are estimating mileage, you can be assured they are not going to short themselves on their reimbursement. Employees rounding mileage up could cost your organization thousands of dollars a year—especially if you are using the IRS mileage rate.
- Accuracy verification is difficult. Checking the spreadsheet to verify accurate mileage calculations not only takes up valuable time but also requires high familiarity with each employee’s travels. Unless the approving manager really knows the territory and distances, he or she will have a hard time determining whether the mileage has been padded. Neither employees nor their managers will assign high priority to accuracy when it requires so much time and knowledge.
Given these realities, you’d think companies would be chucking the Excel spreadsheets left and right. But they aren’t. Many managers and CFOs are too busy or too apprehensive to find a solution. However, the worst words in business are “It’s a tool that we have always used” or “We have always done it this way.”
The innovative option: a GPS mileage application or CRM mileage log
It’s the 21st century, and there are many mileage log options that will integrate with your existing systems and hardware. Among the most sophisticated and easy-to-use tools are GPS apps that record mileage. If your mileage log only stores data that is manually entered click here to check out what a 21st-century mileage log tools looks like.