Maximizing Business Mileage Deductions Through Effective Mobile Employee Training

Employee training is necessary for any operation worth its salt, but for organizations employing a large number of mobile employees who work daily in the field with little direct supervision, that training is crucial. It helps them maintain a high quality of service, reduce the likelihood of common mistakes, perform their jobs as safely as possible, and even save your company money. How? By taking the time to incorporate expense management into your mobile employee training, you’ll be able to maximize tax deductions for one of your biggest mobile employee expenses: mileage reimbursement. 

For companies with a large number of mobile employees, it’s important to ensure you’re properly reimbursing them for using their personal vehicles for work-related travel, and that requires them to keep complete and accurate records. Mobile employee training gives you the opportunity to teach effective mileage tracking habits, so that when it comes time to submit expense reports, the process will run smoothly. 

So how do you train mobile employees to accurately track and report their mileage, so you can maximize business mileage deductions? Below, we’ll walk you through several vital elements of your mobile employee training to ensure you’re covering all of your bases.  

Establishing Mileage Tracking Procedures

The first step of mobile employee training is both a simple and a necessary one: Making it clear to your employees what, exactly, you’ll be training them on. You need to establish the method your employees will use to track mileage. The best way to standardize this process is to introduce a company mileage reimbursement policy that addresses any potential issues upfront and answers any questions your employees may have. 

When establishing a mileage reimbursement policy as part of mobile employee training, it’s important to be as comprehensive as possible, while not over-complicating your explanations. If the policy or the process is too confusing or convoluted, employees might start to cut corners. Any reimbursement policy you create should effectively break down the process employees need to follow when tracking and reporting mileage, and contain clear guidelines about what employees can and cannot do within this process. Implementing controls into your policy to deter theft (such as requiring receipts as proof of travel expenses) can also help with fraud prevention down the line. 

Helping Employees Understand What Should and Shouldn’t Be Tracked

Make it clear to your employees what mileage they should be reporting, and when. Obviously they should be tracking solely business-related mileage, but what is and isn’t a business trip can sometimes be confusing. 

A general rule of thumb is that commutes are usually not considered business-related travel by the IRS. Trips between home and place of work are never deductible, as the IRS considers commuting mileage and business mileage two separate entities. However, trips between home and a temporary work location are deductible if the employee’s primary job is at another location. 

Travel for any sort of task or errand is trackable, but only if that errand is for a business-related purpose, such as going to the bank or purchasing job-related supplies. For companies with multiple locations or job sites, mileage travel between different sites for work purposes can be submitted for reimbursement, as well. 

Reporting Mileage for Reimbursement

Mobile employee training should also clarify for your employees precisely how they should submit their expense reports for reimbursement. Making sure employees are correctly recording accurate mileage is only the first step in the process – they also have to submit an expense report for manager approval in order to receive proper reimbursement. If expense report submission is too difficult, employees might simply choose not to do it. 

Expense reports require the name of the employee making the purchase, the date and time of the expense, the expense’s location or vendor, the reason and amount of the expense, and any relevant additional information. How employees submit that information and supporting documents is up to the business. Some organizations have a paper-based process, while others choose automated options. Digitizing the submission process tends to be both the easiest and most efficient option, but requires having the right infrastructure in place. 

Regardless of whatever process your business uses for submitting expense reports, companies should ensure that it’s easy for employees to do, both for the sake of the employees submitting reports and members of management responsible for reviewing and approving those reports. 

What Employees Need to do for an Accountable Plan 

Another element of mileage tracking your employees need to know is how to meet the requirements of an IRS accountable plan. An accountable plan is a set of guidelines the IRS uses to make sure that reimbursement payments are being handled in a manner compliant with their standards. In order to be accountable and thus non-taxable, a mileage reimbursement claim must meet these requirements:

• The mileage being reimbursed must be provably business-related, and demonstrated to be both ordinary, and commonly accepted in the business in question, and necessary to conduct that trade or business. 
• Each employee must have substantiation in the form of an up-to-date log of each business trip, recording date, destination, mileage, and purpose of the trip. 
• If an employer reimburses an employee an amount that exceeds what was spent, the employee must return excess amounts in a reasonable time period. 

CompanyMileage Keeps Employees On the Right Track 

Ensuring your mobile employees manage mileage reimbursement correctly may take some time and effort up front to effectively train, but once your employees know what is expected of them, everyone benefits. They receive the reimbursements they’re owed in a timely manner, and your business is able to deduct mileage expenses from your taxes. 

If you’re struggling to determine the best path forward for your mileage reimbursement process, CompanyMileage has the technology you need to set you on the right course. Our suite of mobile workforce expense applications helps companies automate mileage tracking, manage trip approvals, and ensure employees are paid accurately and on time. 

Our SureMobile app lets employees log their business-related travel right from their phones. Because our software uses point-to-point calculation to determine the fastest route between the beginning and each trip, employees don’t need to worry about separating work-related and personal mileage. They simply need to take a few minutes each day to organize trips, snap photos of any receipts they may have, and submit expense reports. Then, our system will automatically move these expense reports through each step of your organization’s approval workflow. 

CompanyMileage’s software is designed to be easy for employees to learn and to use, with features like our Quick Capture option, which lets employees log the location and time of a trip with a quick press of a button. CompanyMileage also integrates with all major accounting and payroll systems, ensuring that employees will be reimbursed quickly and accurately once their expenses are approved. 

To learn more about how using CompanyMileage can help manage mileage reimbursement for you and your mobile employees, contact us for a demo today!