Fleet Management Software

Redefining How Company Vehicles Are Administered

In order to fully take advantage of the many benefits fleets offer, companies must ensure that their programs are administered effectively. Many companies absorb some or even all of the costs of personal use because their employees don’t maintain detailed mileage logs throughout the year, as required by the IRS. As a result, companies don’t have an accurate way to distinguish business mileage from personal mileage and find it difficult to administer accurate personal use chargebacks.

How Motus Helps

Motus’ fleet management software accurately measures employees’ exact commute, business, and personal miles and automatically calculates the correct amount to charge mobile employees for personal use of their company vehicle. Chargeback calculations are based on individual employee usage and fuel prices where the employee operates their vehicle. Unlike traditional fleet telematics, Motus mileage capture is entirely driver initiated – there is no hardware to install and no privacy infringement.

Fleet Cost Savings

Cost Recovery

Drive Compliance in Your Mobile Workforce

Compliance

Simple Tax Reporting

Tax Reporting

Ready to give it a try?

Schedule a FREE Demo Now
compliant-logs

Cost Recovery via Personal Use Chargebacks

It is very common for companies to allow mobile employees to use a company vehicle for personal reasons. Many organizations even charge their employees for this personal use, which in theory, is a fair arrangement for both parties: mobile workers offset a portion of the costs they generate while using their company vehicle for personal use, while employers recover some of the additional vehicle expenses. In practice, though, inaccurately charging for personal use costs employers a lot of money.

Employers absorb any and all extra costs that personal use chargebacks do not cover. Motus data reflects that the average cost for personal use is close to $230 per employee, per month. When compared to the national average personal use chargeback of $128 in 2015, roughly $1,200 per employee is lost to under-charging for personal use each year. Companies with dozens of employees traveling in fleet vehicles will find the costs reaching into the tens of thousands of dollars, or higher. On the contrary, the rare employee who overpays for the personal use of a fleet vehicle may feel unfairly burdened–and rightly so. Without accurate chargebacks, both employers and employees are at risk of overpaying.

Motus mileage capture solutions take mistakes and guesswork out of the equation and can save the typical fleet not charging for personal use ~$2,800 per year/per driver. It further reduces the administrative effort for drivers and managers, keeping them focused on their core job functions.

So how does it work? Each day, mobile employees capture the business mileage they drive using Motus’ mileage capture solutions. At the end of each month, employees simply submit their business mileage and month-end odometer reading to Motus- the rest is up to us. Motus calculates the true personal use for each mobile employee and reports to you the actual personal use chargeback that should be applied. With Motus’ fleet management solutions, mobile employees have visibility into the business, personal and commute mileage they record on a daily basis, and are presented the business and personal use percentages when they submit their mileage – there are no surprises – employees are displayed the amount they’ll be charged for personal use and the variables that went into calculating the chargeback amount.


IRS and Company Policy Compliance

Under-reported personal mileage also puts employers at risk of costly IRS audits. The IRS requires that employees maintain detailed logs that cover daily mileage, stop locations, and the purpose of each trip to substantiate the business and personal use of fleet vehicles. Manual mileage logs are the most common tools used by employers and their employees to report personal use and many employers have written policies mandating that employees maintain this documentation. Unfortunately, manual, employee-reported personal and business mileage leaves plenty of room for mistakes, inaccuracies, and even deception. Common industry knowledge holds that 15-18% of fleet miles driven are for personal use. Employers who have implemented Motus mileage capture solutions have seen the percentage of personal use climb as high as 45%–more than double the high-end of industry estimates.

Motus removes the administrative headache of manually maintaining daily mileage logs. Mileage capture technology is easily accessible through an employees’ personal or company-provided smartphone and the process of creating detailed and IRS-compliant mileage logs is limited to the push of a button. Motus automatically calculates mileage and creates an IRS-compliant daily mileage log for each driver, eliminating all manual data entry and ensuring that you and your employees are safeguarded in the event of an audit.

compliant-logs

compliant-logs

Accurate Imputed Income Calculation and Reporting

The IRS requires employers to accurately impute income for employees’ personal use of company-provided fleet vehicles. While the methodology for imputing income is clearly spelled out in IRS Publication 15-B, a key variable in its calculation is the percentage of personal miles (out of total miles) driven by each employee. Organizations that rely on employees to manually track and self-report personal mileage each year leave themselves open to the risk of inaccurately reporting imputed income to the IRS, often times the result of employee estimation and failure to maintain detailed daily mileage records.

Motus removes the risk and guesswork associated with imputing income. Our mileage capture solutions automatically calculate mileage and create IRS-compliant daily mileage logs for your employees, eliminating the manual record keeping and personal use estimation that is so common in fleet management.

In addition to monthly reports that detail true personal use and chargeback amounts for each employee, Motus takes the burden of calculating imputed income off your plate. Following the IRS’ rules for fringe benefit valuation, Motus calculates the appropriate imputed income for each employee based on the actual business, personal, and commute miles driven throughout the year. Most importantly, Motus imputed income calculations are supported by detailed daily mileage logs and monthly personal use chargeback amounts, eliminating estimation and the risk of inaccurate IRS reporting.

Related Resources