Mileage Fraud in the Workplace

Employee integrity within the workforce is something desired by all, but sometimes it is inevitably unattainable.

As it turns out, one of the most common examples of employee theft happens to be mileage fraud. In fact, mileage fraud occurs even more frequently than employees over reporting tips, inflating the cost of items beyond their true price, or submitting expenses for returned purchases.

According to a Chrome River Survey, roughly 5% of respondents revealed that they had committed some version of expense fraud. At first glance, this percentage may not appear all that astounding, but just think: if even 25 of your 500 mobile employees are falsely reporting mileage, there is no way to justify this as being beneficial for your organization.

You may be thinking, “Perhaps employees lack a certain understanding of the process and are just making honest reporting mistakes, could this be the case?” Well, the short answer is yes. This could be the case for some, but there exists a much larger issue at hand.

Part of why this phenomenon appears to be a recurring theme is due to the existing nationwide, archaic way of reimbursing mileage expenses. The vast majority of companies continue to require their mobile employees to submit their mileage reports via paper mileage logs or Excel spreadsheets. These processes allow employees to create their own destiny (whether intentionally or not), by having free reign to submit reports at their own personal discretion. This can lead to both inaccuracy and unearned cash in the pockets of your workforce. Not only can this be extremely costly for your company, but also for your employees if the IRS decides to come knocking.

In order to reduce your organization’s risk of mileage fraud, automation should be a top priority. As documented by a Forrester Research survey of finance leaders, 73% of respondents confessed they would be re-evaluating and modifying their T&E systems within six months. Simply put, the purpose of technology is to make people’s lives easier. As it turns out, mileage reporting and reimbursement should be no different.

With automated mileage tracking and reporting technology, your organization will immediately gain more visibility and insight into expense reports and reduce costs due to mileage fraud. Even further, your company could benefit tremendously by opting for IRS compliant, fixed and variable rate reimbursement programs.

Get the Mileage Fraud White Paper

The Author

Danielle Lackey

As General Counsel, Danielle is responsible for all Motus legal affairs and works with strategic business units to drive initiatives that bolster IRS and legal compliance for Motus clients. Prior to joining Motus, Danielle co-founded and served as CEO of Cadence Counsel, a company that helps law firms and companies thrive in an environment where work, as we know it, is rapidly changing. Before founding Cadence Counsel, Danielle practiced as a litigator at Latham & Watkins, representing major corporations and senior executives in complex civil and criminal matters. She earned her J.D. with Distinction from Stanford Law School and is a graduate of Brown University (Phi Beta Kappa, Magna Cum Laude).

Read more by Danielle Lackey

Loved it?

Share it!

Subscribe!