Tracking and paying for mileage expenses can create complex challenges for businesses. The process can be time-consuming and riddled with errors, from manual tracking with logs and spreadsheets to inconsistent reporting. Smart, busy teams understand that automation is essential to spend less time manually tracking mileage and more time driving business growth.
In today’s mobile work environment, companies need to be able to manage travel expenses like mileage, flights, and more, quickly and on the go.
Mileage expense management specifically involves logging and reimbursing mileage costs for business trips. It must provide accurate data for tax purposes and should save time by reducing the need for manual data entry.
The term 'mileage rate' refers to a set amount of money per mile that businesses can deduct or reimburse when one of their employees drives for work. Many companies offer employees a mileage rate for business-related miles/kilometres, typically driven by personal vehicles.
To calculate a mileage rate, you need to know the total number of miles travelled for business purposes and the applicable mileage rate. Simply multiply the total number of miles travelled by the mileage rate to calculate the total reimbursement amount. For example, if the mileage rate is $0.50 per mile and you travelled 100 miles for business purposes, your reimbursement amount would be $50.00 (100 x $0.50).
There are some big drawbacks when it comes to conventional methods of mileage expense management. From lost receipts to lack of visibility, inefficient technology can put the brakes on good spend management, creating challenges that include:
Manual calculations and inaccurate data:
Calculating mileage can be time-consuming and prone to human error. Businesses doing this will benefit from technology that automates this process so that their employees can focus on higher-value activities instead.
Lost receipts can mean incomplete records, making it difficult or impossible to claim deductions or reimbursements.
Lack of visibility: Conventional travel expense management may lack visibility, making it difficult for businesses to track expenses in real-time and make informed decisions.
Traditional travel expense management may offer little control over expenses, making it almost impossible for businesses to enforce policies and prevent fraud or abuse.
These drawbacks can lead to inefficiencies, increased costs, and compliance issues for businesses. By using modern spend management software to track and pay for mileage expenses, companies can overcome these challenges and streamline their travel expense management processes.
At Payhawk, our mileage feature means admins can set different rates for mileage based on anything in the country that the business operates as required by law, including distance thresholds. This feature is especially relevant in countries where regulations state multiple rates for mileage, such as Austria, Czech Republic, France, Germany, Ireland, Italy, the UK, Poland, Switzerland, and the US.
With this feature, employees can select which rate applies to their trip and the distance thresholds. These rates are then automatically used in our software's mileage tracking and calculation. This allows for a more accurate and efficient way of calculating business mileage expenses for employees in various countries with different regulations regarding mileage rates.
At Payhawk, our app makes employee mileage tracking easier than ever. Here's how it works:
For customers using Payhawk, admins can now set multiple rates for mileage, including distance thresholds. Employees can select which rate applies to their trip and automatically apply thresholds to the mileage calculation if relevant.
Managing business mileage expenses can be a daunting task for many businesses. However, applying more rules to determine mileage reimbursement couldn't be easier with our new multiple rates feature for mileage expense management. Here are some of the benefits of this new feature:
Fully customisable mileage rates
With this new feature, you can now fully customise your mileage rates by defining different rates based on your preferred classification. For example, you can determine rates based on vehicle type, travel purpose, or any other classification that enables you to meet regulatory requirements. This makes it easier to manage and track expenses for different types of trips.
Single-trip distance thresholds
Another benefit of the new multiple rates for mileage expense management is the ability to set single-trip distance thresholds. This means you can define different rates based on the distance traveled for a single trip.
Accumulated annual distance thresholds
In addition to single-trip distance thresholds, you can also set accumulated annual distance thresholds. This means that you can define different rates based on the total distance an employee travels in a year. For example, you can set a certain rate for employees who travel more than a certain distance in a year and a different rate for those who travel less.
The new multiple rates for mileage expense management puts businesses in the driving seat when it comes to managing expenses more efficiently. With fully customisable rates, including single-trip distance thresholds, and accumulated annual distance thresholds, it's now easier than ever to manage and track expenses for different types of trips.
Businesses can now easily set different trip rates by using the new multiple rates feature for mileage expense management. This ensures regulatory compliance as you can now calculate mileage efficiently according to the rules in your country. And with a fully customisable rates feature, this is something that employees can now do on their own. That means finance managers will no longer have to edit each new expense as it happens. Ultimately, managing your miles and expenses is easier than ever, making it possible to do more with less.
Steer your finance team to success with easy travel expense management. Book a demo today to find out more.
Trish Toovey works across the UK and US markets to craft content at Payhawk. Covering anything from ad copy to video scripting, Trish leans on a super varied background in copy and content creation for the finance, fashion, and travel industries.