By Lara Gibbons
November 30, 2023
Mileage tracking play a big role in the lives of many drivers, employees and company decision makers. It’s a small, every day thing that can have a big impact on personal lives and bottom lines. So what exactly is mileage tracking? What does mileage tracking mean? And what makes a mileage tracker app the best mileage tracker app? We’ll break down all of that and more in this post.
Let’s start at the top. Mileage tracking, or mileage capture, is the recording of the miles your drive for business. There are a few reasons to do so. Before the TCJA, W-2 employees would track miles for tax deduction. However, this is no longer an option. Most full-time employees or contract workers record their mileage for reimbursement purposes. Mileage tracking is essential to receiving a reimbursement.
If you’re a contract worker or a 1099 employee, you’ll want to keep track of your mileage for another reason. Maybe your temporary employer is providing you with a reimbursement. If they aren’t, or you’re an independent contractor, you want to track business miles so you can claim them on your taxes. There are several ways to keep a mileage log. Some are easier than others.
A business mileage tracker uses the GPS systems and movement sensors in a driving employee’s phone to capture the distance they’re traveling. Some employees continue to record their mileage manually. However, that can lead to a number of issues. Mileage trackers can simplify the process of recording miles by automating it. These tools are known by many names: mileage tracking apps, business mileage trackers, vehicle mileage trackers, mileage capture apps or simply apps to track miles driven.
It’s important to note that, while the device uses GPS and motion sensor capabilities of the phone, they aren’t sharing locations with employers in real time. This isn’t a surveillance effort, but a more convenient way to capture the business trips traveled accurately.
A free mileage capture app will be hard to come by. Contractors and small businesses may find a free trial, or some freemium option where you have to pay to unlock certain features. Mileage apps for individual drivers can cost anywhere from $3 to $30 a month.
Our team has decades of experience with mileage capture. But one thing we don’t offer is a single-user mileage app. We understand there are a lot of workers out there that need an app to track their mileage for tax and reimbursement purposes. Even if we can’t provide you with a free mileage tracking app, we can still let you know what you should be looking for in an app.
There are a considerable number of benefits to using a mileage tracker. For companies, it’s IRS compliance, increased visibility, decreased mileage fraud, reduced administration. For contractors, it’s mostly about tax deduction. Let’s explore these benefits further, beginning with one of the most essential reasons to implement a mileage tracking app: IRS compliance.
There are two primary reasons for mileage logs: reimbursement and IRS-compliant records of the miles reimbursed. To meet IRS compliance, mileage logs must record four essential pieces of information. If the mileage tracker isn’t capturing start and end locations, dates and distances, it is not serving its purpose.
In a world of predictable expenses and monthly budget plans, mileage reimbursements stand out as a liability for businesses. Data from manual mileage logs can be captured and graphed manually. However, in today’s technology-driven world, being able to calculate expenses on-demand is incredibly valuable.
By capturing business driving trends more effectively, companies can analyze expense patterns, anticipate how much money will be spent each month and project how much total mileage reimbursement will be paid out over the course of a year. This level of business insight can give managers and executives a leg up when it comes to competitive strategy.
Mileage fraud is one of the most common forms of employee theft. Expense reimbursement fraud accounts for 17% of business expense fraud. Oftentimes, that fraud is directly related to T&E items. Many companies are simply unaware of the fraud because their processes are unable to check reports in an automated, efficient fashion.
With an automated mileage tracking app, companies receive GPS-verified mileage logs from their employees. This narrows the possibility of mileage fraud, intentional or otherwise, considerably.
A good mileage tracking app provides all the above. But the best comes with a team responsible for gathering the mileage information, managing reimbursements and providing insights into your workforce. Automating mileage tracking boosts productivity for those in the field and those busy filling out the logs. With a mileage app, logs can easily be submitted for reimbursement and free up the administrative work of verifying all employee mileage logs.
Companies implement business mileage trackers to increase visibility, meet IRS compliance, decrease mileage fraud and reduce admin work. Again, contractors mainly use business mileage trackers to keep track of their mileage for tax deductions. But some mileage trackers are better than others. What makes the best mileage tracker app? Here are a few ways that certain apps set themselves above the rest.
Automated mileage tracking benefits the company and its employees in numerous ways. Replacing unreliable manual mileage logs with automated tracking does away with accuracy challenges and administrative burden. Organizations that adopt mileage capture technology have been able to reduce mileage by as much as 25%.
Every business driver needs to track four key things in order to keep an IRS-compliant mileage log: the date, destination, the exact distance between two business stops and the purpose of the trip (which is the most commonly forgotten). The best mileage tracker app helps provide accurate information and a fair reimbursement for both mobile workers and the company they’re driving for.
Having a mileage capture app is one thing. Having one that begins with the tap of a button? That’s something else. Recording the odometer, start location, the date, those are all issues a driving employee won’t have to worry over with the right app. Once the trip is over, the app acknowledges the stop. All the employee has to do is fill in the purpose of the trip. From there it’s easy to submit.
Another benefit to automated mileage tracking? Easy mileage submission. No more scraps of barely legible handwriting turned in to an overworked member of the accounting team. A digital version should arrive, easily read and transferable to whatever program your company uses to compute mileage reimbursements. If a mileage tracker app does not offer this, it’s not really the best mileage tracker app. Not a must, but a really nice to have.
Everyone knows using a phone drains its battery. That’s doubly true if the phone is working hard at updating your location. Whether your phone is the latest version, or you’ve been holding out on updating it until you absolutely have to, a little extra battery can go a long way. Again, this isn’t necessary, but it sure is nice to have.
We’re through the basics. Now for the nice to haves. And it’s nice to have a feature that allows you to tell your phone when your business hours begin. Say the app starts recording your road trip to Disney with the family? You should be able to mark the trip afterward as a vacation.
As we shared earlier, we’ve been in the mileage reimbursement space for decades. With customer feedback and technological advancements, we’ve put a lot into our mileage tracker app. And yes, it passes all of these tests. Contractors may not be able to make use of it, but we encourage you to find an app that meets much of the criteria above. If you’re exploring this topic for your company, feel free to demo our product to see what it’s all about.
Not ready for that quite yet? There’s plenty more to learn about the importance of accurate mileage tracking. Check out our Business Guide to IRS Code and Vehicle Programs to gain more insight into tax implications and compliance.
With Motus, accurately capturing business mileage has never been faster or easier.
Contact us today or take a virtual tour of the Motus Platform.
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