Is your accounting adequate? Asked that question, most organizations would respond with, “Who’s asking?” and “What does adequate mean to them?” When it comes to employee mileage reimbursement, the people asking are the IRS, whose standards for documentation are both outdated and problematic for employers.
IRS Publication 535, Business Expenses, says, “Your employees must adequately account to you for their travel, meals, and entertainment expenses. They must give you documentary evidence of their travel, mileage, and other employee business expenses. This evidence should include items such as receipts, along with either a statement of expenses, an account book, a dayplanner, or similar record in which the employee entered each expense at or near the time the expense was incurred.”
The hated standard mileage sheet
For decades, mileage reimbursement all came down to a slip of paper that often showed the wear and tear of being scribbled on, dropped on the floorboard, pulled in and out of a briefcase and lost for a few weeks in a desk drawer: the standard mileage sheet. Employees hate them because they force workers to stop what they are doing before and after every trip and record their odometer readings, remember the date, think about where they went before lunch, and on and on.
Employers hate the standard mileage sheet because they bog down the reimbursement process, demand time and energy to check for accuracy, and they are notoriously vulnerable to fraud. Most importantly, mileage sheets as documentation would not fit most companies’ definition of adequate. They are simply claims made by employees.
Did the employee actually make the trip? Was the distance recorded for the trip accurate? Were there side trips made that were not work-related but are still part of the reimbursement claim? Is there a commute or seven hidden in that mileage sheet?
Mileage sheets: Don’t hate them, automate them
Everywhere we look, clunky and costly paper-based processes are being automated to save time and money while improving accuracy and compliance. When it comes to employee mileage reimbursement, the automation comes in the form of software tools that make it simpler and faster for employees to record their mileage and submit their claims by making the process electronic, even portable.
The problem is that most of these tools don’t offer effective verification or ensure IRS compliance. They are simply electronic versions of the paper mileage sheet.
SureMileage by Company Mileage not only automates mileage reimbursement, it addresses the shortcomings of traditional systems by using a different approach. Employees report their starting point and destination and the system calculates the driving distance between them. Rather than verifying the miles that were driven, it calculates the expenses to be reimbursed.
Compliance with a bonus you can spend
SureMileage not only eliminates mileage sheets, it prevents the errors and fraud mileage sheets invite. Hundreds of organizations use SureMileage because they can save 20% to 30% on their mileage reimbursement expenses while ensuring compliance with IRS regulations. They get visibility, accuracy, security, compatibility and mobility in one package that’s far more than adequate.