Numerous organizations across the country rely on employee-reported mileage to run their vehicle reimbursement programs. But self-reported mileage has a fatal flaw: "fat fingers."
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 self-reporting their business mileage, you’re setting yourself up for trouble.
The Self-Reported Mileage Log: 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 capture 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 technology to log and calculate mileage, it is most likely costing your company.
The High Costs of Human Error
Every industry the world over has suffered at one time or another from the phenomenon that is “fat fingers.” Human error can take many forms, including an individual pressing the wrong key during a data input activity. In some cases, minor slips of the fingers have cost organizations millions of dollars.
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 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 Automated Mileage Log: Today’s 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 capture technology, you will not only obtain more accurate mileage numbers (and therefore control costs)—you will also provide your employees a way out of the tedious task of recording and adding up their own mileage.
Evaluating Your Mileage Log
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 control of your budgets and eliminate fat fingers by automating your mileage log today. Contact mBurse now to find out.