Businesses across the country rely on employee-reported mileage to run their vehicle reimbursement programs. But reporting mileage on a spreadsheet log has a fatal flaw: "fat fingers." Before you download that "free spreadsheet mileage log template," consider the costs.
The true costs of a spreadsheet mileage log
From 2009 to 2012 the city of Los Angeles cost its taxpayers $352,000 via excessive mileage reimbursements to its employees. An audit found significant errors in the amount mileage reported by city workers. In other words, a bad case of "fat fingers"—human error in the input of information—severely impacted a city already facing financial problems.
Any organization with employees that self-report business mileage should heed the warning of Los Angeles. The most expensive words in business are "we have always done things this way." In the age of automation, if your employees are still logging mileage in a spreadsheet, you’re setting yourself up for trouble.
Spreadsheet mileage logs: Prone to human error
Mileage reimbursements are low priorities for most organizations. You provide a mileage reimbursement rate and a mileage log, and the program pretty much runs itself. However, tools now exist that integrate mileage tracking with the hardware (mobile devices) and software (CRMs, time logs, etc.) that you already use. Is there any reason to stick with a traditional mileage log?
If you are providing spreadsheets or some other type of mileage log that is self-reported, it will be worth it to take the time to explore other mileage capture options. Self-reporting means your log is prone to human error. If employees are not using up-to-date technology to log and calculate mileage, it is most likely costing your company.
The true costs of downloading that "free spreadsheet mileage log template"
If you want a quick, inexpensive way to give employees a log that calculates and totals their business mileage, the internet is full of links to free or inexpensive templates. You can easily download an Excel file that has all the right columns and rows labeled to IRS specifications and will allow drivers to input their business mileage. The spreadsheet will calculate everything they input. But before you continue down that path, consider the true costs of that "free" spreadsheet download.
In August 2013 an employee at China Everbright Securities made a "fat finger" trading error that led to multi-billion-yuan losses. There was also a "fat finger" mistake in the technology industry, when a computer programmer inadvertently pushed a button that overwrote not only his own work, but also the work of hundreds of other plugins unrelated to the project he was working on. Sometimes human error can be beneficial, such as in January 2014, when shares of HSBC stock rose 9.8% because of a "fat finger" error.
But the concept of a beneficial human “error” raises the question of whether all "slips of the finger" are accidental. It would hardly be surprising to find that the inflated mileage reimbursements in Los Angeles arose from employees padding their mileage numbers. When you entrust employees with the tracking, calculation, and reporting of their business mileage, you are trusting them to be accurate and honest all the time.
The mileage tracking app: Today’s business tool of choice
Today’s mobile employee is tasked with many additional responsibilities outside of their primary role (e.g. sales rep, account management, etc.). Managing CRMs, sales reports, internal meetings, travel scheduling, client meetings, and more can lead mobile employees to take short cuts or multitask. Even a very honest employee may find estimating mileage preferable to keeping precise records. Multitasking also increases the risk of an unintentional recording or calculating error.
It’s important to give employees tools to manage tasks and increase productivity. With the new automated and integrative mileage tracking apps, you will not only obtain more accurate mileage numbers (and therefore control costs). By leveraging the existing technology of mobile devices, you will provide employees a way out of the tedious task of recording and reporting their own mileage. Today's mileage tracking apps automatically track business travel and allow employees to review and submit reports directly from their mobile phone.
How to evaluate your business mileage log options
Are your employees using spreadsheet mileage logs? When was the last time you audited your mileage logs? How much are "fat fingers" costing your company? You can’t manage what you can’t see.
Take the time to check your mileage reimbursements against the actual productivity of employees. You don't want to be like the city of Los Angeles, blowing the budget with over-reimbursements.
Take control of your budgets and eliminate fat fingers by automating your mileage log today. Contact mBurse now to find out.