More and more organisations are opting for non-obtrusive technology solutions to capture the miles their employees do for work, instead of the traditional ‘expenses’ reimbursement systems.
There’s plenty of evidence on the ROI of mileage capture solutions for companies. Not least that some solutions offer a fee guarantee with their service since they believe that there’s always a lot of loose change floating around in the business mileage declaration, private fuel and business mileage reimbursement processes.
An automated mileage capture solution allows for much higher analysis and reasons for that fuel spend.
Whether reimbursed directly through payroll or expenses or using a fuel card to manage fuel spend, adding accurate mileage information creates greater granularity and analysis.
The key issues, when compared with a traditional ‘expenses’ reimbursement solution, without mileage capture, are the following:
- Very rarely do expense claims get recorded accurately or properly (for example, the precise distances, whether the trip took place and whether the claim amounts were correct).
- Expenses systems aren’t always that good at calculating the correct reimbursement amounts. Typically, organisations use various reimbursement rates which are linked to fuel type and engine size. Drivers can easily (and mistakenly) input the incorrect vehicle and engine sizes when requesting reimbursement.
- When mileage capture isn’t in place, then there’s no way of ensuring that every penny spent on fuel is spent appropriately. Having mileage capture, or some form of mileage calculation, allows all spend to be adequately accounted for.
From a compliance perspective, the payment of business mileages is required to be supported by accurate records that provide information and justification for the trip. Given that fuel represents a high cost of operation, either as a business expense or as part of the fleet costs, managing this area is essential. And, in managing mileages, the recovery of VAT/Tax on fuel expenses is easy and wholly worthwhile.
Having accurate mileage records also enables other management and policy reporting activities to happen. Lots of organisations have a job need eligibility requirements for a car or cash allowance to be put in place, for example, you need to cover 10,000 business miles each year, or 16,000km to be entitled to a company car or cash allowance. Or, the trips that you complete for business and commute purposes could be carried out in a greener way or alternate fuel vehicle. Accurate mileages through mileage capture allows this to be managed accurately and effectively, and the cost savings are substantial.
Typically, the range of savings associated with accurate and compliant mileage records can be anywhere between 10% and 18% of the fuel bill depending on nature of fleet (e.g. LCV versus company car/cash). And eligibility or alternate fuel savings can be in the region of $1000 per vehicle per annum.
The aim of any organisation considering automated mileage capture should be the consideration and burden on employees and drivers.
Having an incredibly simple and non-obtrusive solution to gathering business trips helps with engagement and proper use. Any additional functionality that can be delivered through this process to make driving and road use safer provides benefits for all.
