The IT Guide to Vehicle Reimbursement Programs

Most organizations with employees who operate vehicles as part of their jobs have some form of a car allowance or mileage reimbursement that they pay. In the past, these programs have typically required little technology to run. However, as more companies have adopted travel expense systems like Concur, Zoho, and Navan, employee reimbursements have become reliant on software. 

Similarly, as companies have left paper mileage logs and Excel spreadsheets behind, organizations face an array of mileage-tracking apps to choose from like mLog, MileIQ, and Kliks. Travel expense and mileage tracking software may be used in tandem with a car allowance or a mileage reimbursement, though car allowances typically do not require a mileage log.

An increasingly popular approach to reimbursing vehicle expenses is called fixed and variable rate or FAVR. Many organizations have been switching to this data-driven approach from traditional car allowances, mileage reimbursements, and fleet vehicle programs.

FAVR reimbursements require the greatest amount of software integration because, in addition to requiring a mileage tracking app, the program’s reimbursement rates are based on algorithms that require cloud-based administration.

An organization will choose FAVR reimbursement because it is non-taxable, highly accurate, and cost-effective. But the program administration requires a level of sophistication that is best outsourced.

Typically, the vendor hired to administer the program will bring their own set of tools that must be integrated with existing systems. In the following sections we’ll look at these types of tools.

Companies often choose mileage tracking apps because they offer convenience, automation, visibility, and valuable data. Employees will appreciate the app to the degree that it streamlines their job responsibilities and makes the reimbursement process easier.

These apps are typically GPS-based and often contain a number of helpful tools, including navigation, route planning, hands-free mode, and trip data collection. Many of these apps also come with an administrator dashboard that provides helpful data and makes the approval process easy.

Many mileage apps also come with an administrative dashboard that can be accessed either on a mobile device or on a desktop. This software is designed to enable management to approve mileage for reimbursement purposes and to generate reports that can provide business travel analytics and insights into productivity of mileage for different employees.

Challenges with this software can arise if it does not work well or integrates poorly with existing systems. If the dashboard works well, however, it is a huge source of convenience and added value via the business insights its reports supply.

As IT personnel, you will find yourself on the receiving end of questions from employees who use the software related to the reimbursement program. You can start by evaluating the helpfulness of the app instructions and help videos located in the HelpDesk of the vendor’s website. 

You will also likely find yourself communicating with the technical support team of the vendor of whatever mileage app or reimbursement program your organization chooses to partner with.

If technical support is difficult to reach, difficult to communicate with, or unable to resolve problems quickly, that is a sign your organization has partnered with the wrong vendor.

Problems with technical support may signal a larger customer support problem, which other members of the organization will experience as well – particularly the employees who use the mileage app or admin dashboard. 

GPS-based mileage apps can raise all sorts of privacy questions for employees. An app with stronger privacy protections can be an added benefit for these employees.

Privacy protections features can include

• Real-time tracking without real-time reporting
• Ability to set business hours (tracked) and personal hours (not tracked)
• Ability to edit out personal trips taken during business hours

If trip data is not uploaded into the cloud-based reporting system until it comes time for management to review and approve the mileage, then there is a fence between employees’ real-time habits and locations and management’s knowledge. Privacy-conscious employees will appreciate the freedom to edit out personal errands or stops during a business trip, that’s fair to both in terms of privacy and accurate mileage reporting.

But privacy is not just a matter of employee to boss – there’s also the matter of properly securing employee data within the vendor’s cloud.

Because your organization and its employees will be using third-party software on their devices, it is important to evaluate the security risks that come with each product. It is important to evaluate the security risks based on both the partner organization’s practices and the employees’ practices.

Because employees may be using the mileage app on personal phones, there are certain security risks that employees could pose to the degree that they are dealing with company data.

This is where organizational policies governing the use of personal devices for work can come into play.

As for the mileage app or reimbursement software vendor, their own privacy and security practices should be evaluated. With so much employee data going into their cloud-based software, what are their encryption practices? How secure is their data storage? What are they doing to prevent data breaches and cyber attacks that could compromise private data? These are questions worth asking.

The IT Department of your organization can play a key role in vetting any organization you partner with to support vehicle reimbursements for your employees. IT also plays a key role in helping that reimbursement program to flourish and enable employees to do their jobs rather than worry about getting reimbursed properly or face constant frustrations with mileage or reimbursement software.

If your organization is currently looking to partner with a reimbursement plan administrator or to adopt a new mileage tracking app, consider the products and services offered by mBurse. The best way to get started is to schedule a demo of either our mileage app, mLog, or our FAVR reimbursement program – or both.