Like they are with just about everything, the IRS is pretty strict about how businesses log mileage. For businesses that want to maximize tax deductions and maintain the utmost compliance with IRS regulations, keeping organized and accurate logs of employee mileage is paramount. But when it comes to keeping an IRS mileage log for tax purposes, what’s the best way to go about doing it? While the words ‘mileage log’ may bring to mind the classic images of a pen and a pad of paper, or a meticulously updated spreadsheet, the real answer may lie in automation.
In this article, we’ll take a look at how using a digital solution to create an automated IRS mileage log can simplify the process of recording mileage while minimizing errors and saving you and your employees time as well.
Automation as a Solution for Your IRS Mileage Log
Before we start getting into the gears of how automation can help your company, let’s slow down and take a look at manual mileage tracking. IRS mileage log requirements entail that the log must be able to prove the amount of miles driven for each business-related trip, the date and time of each trip, the destination, and the trip’s business purpose, and they also prefer that these logs be kept in a timely manner. When it comes to the log format itself, though, that’s up to you, as long as all the required information is there, which means traditional, manual logging options are still on the table.
However, just because you’re technically allowed to keep your mileage records in the form of a paper log, an account book, or a spreadsheet, doesn’t mean that you should. Manual data entry, just like it says on the tin, requires a lot of manpower and energy that you and your employees could be exerting elsewhere. Having each employee manually enter data for every single trip in a timely way and then getting those logs approved is a time-consuming process, with a lot of room for error, miscommunication, and misplaced documents!
By contrast, automation is specifically designed to meet IRS requirements while making the process as efficient, simple, and accurate as possible. Digital logging solutions calculate mileage automatically for each trip, so employees and management don’t have to do math and dig through odometer readings. They also automate mileage logs for each trip, with all the information the IRS requires, and can often integrate with an expense tracking system to make it easier for employees to submit mileage reimbursement claims.
Reporting that shows mileage amounts by employee, department, or project also makes it easier to analyze and manage mileage expenses. Automated mileage solutions will also allow businesses to customize settings and rules for mileage tracking to fit their specific needs and policies, such as if your business has daily per diems.
The Benefits of an Automated Solution
By moving your IRS mileage logs to an automated format, you improve your recordkeeping in a number of ways. For one thing, automated mileage logs eliminate the possibility for manual data entry errors, as mileage data can be automatically captured and stored in the system, and by reducing the likelihood of data entry errors you also reduce the possibility of incorrect mileage reimbursement claims, saving you any number of headaches in the long run.
Automated solutions also improve accuracy, by using GPS technology to track the exact distance traveled and exact locations, providing more specific and accurate mileage data than manual methods do. Additionally, eliminating the need for employees to manually track and record mileage saves them time, allowing them to focus more energy on other important tasks. This streamlining and time-saving extends to the reimbursement process, as well!
Last, but certainly not least, automated solutions can provide data in real time on employee mileage usage, giving businesses a more accurate idea of how employees spend their time on the job, and allowing organizations to monitor mileage expenses and adjust employee budgets as necessary.
What is the Best Solution for You?
Once you’ve accepted how keeping an automated IRS mileage log can be a boon to your business, it’s time to consider what the optimal digital solution for your business looks like.
When looking for an automated option for tracking mileage, the first thing you want to ensure is that your employees can actually use it! For a business with a high volume of mobile employees, your best option is a solution with a robust and easy-to-use mobile app, so they can use it without hiccups anywhere they go. Ideally, this app should also be able to integrate with your accounting or payroll systems so claims don’t get stalled between approval and reimbursement payments being issued. Also, obviously, it needs to be IRS compliant!
Let’s Talk Security
Security is also a serious factor when considering the options at your disposal. It’s very important that your data remains secure with the solution you choose. If you work in the field of healthcare, any mileage tracking solution you and your company use must be HIPAA compliant, as data will inevitably include sensitive information such as patients’ contact information and addresses.
How is Mileage Tracked?
Weighing automated options also means looking at how different apps will track employee mileage. Many solutions will use GPS technology to track mileage, but this option means that it’s still up to employees to determine whether mileage is work-related or personal.
A more fool-proof system for logging mileage is point-to-point calculation, in which employees enter the starting and ending locations of a business trip, and then the total mileage is calculated automatically. This prevents personal trips and mileage padding from ending up on the books.
CompanyMileage Keeps It Simple
An automated solution is the best way for your business to manage the process of keeping an IRS mileage log for every employee, and CompanyMileage is the best of the best! Our suite of mobile workforce expense applications ensures that business owners will always have an accurate, organized system for tracking employee mileage expenses at their fingertips.
SureMobile lets employees log trips right from their smartphones, and since our software calculates the fastest route between the beginning and end of each trip, they never have to worry about separating their work-related and personal mileage. Employees simply need to take a few minutes each day to organize their trips, snap photos of any receipts, and submit expense reports for review.
SureMileage automatically moves each report to the next phrase in your organization’s approval workflow for review, eliminating pileups and bottlenecks. Our system can even integrate with your payroll and accounting software, to ensure timely reimbursement for approved expense requests.
Keeping an IRS mileage log doesn’t need to be a time-consuming process. Standardize and simplify the way your company manages mileage expenses by requesting a demo with CompanyMileage today!