A guide to mileage tracking
Mileage tracking is a key part of any fleet management system. But it’s about much more than just keeping a log of how much distance your vehicles have covered.
An effective mileage management plan is essential for working out expenses, keeping track of drivers’ working hours and meeting your tax obligations. What’s more, it’s vital for reducing transport costs and keeping emissions in check.
However, traditional ways of doing this can be complex and time-consuming. So whether you’re a small firm in charge of a handful of company cars or managing a large fleet, modern tools will be hugely useful.
Here’s what you need to know about mileage tracking and how it can benefit your business.
What is mileage tracking?
Mileage tracking tools help you keep a complete, accurate record of your fleet’s activities. This will show how your vehicles are being used, which trips are eligible for tax deductions and more.
But simply making a note of the date and the odometer or the trip meter at the start and end of the journey is no longer enough. To be effective, you need to be recording:
- Accurate mileage
- Driving hours
- Journey dates
- Start and end destinations
- Purpose of the trip
- Fuel used
The evolution of mileage management
In the past, mileage management was a manual, tedious process. Expenses claims were reliant on pen and paper – or, more often than not, hastily-scribbled service station napkins – to log the miles driven. Each driver was responsible for entering their own details and calculating their own business miles.
The problems with this are obvious. The process is far too open to error or abuse, which means many companies end up overestimating their mileage.
For instance, one 2015 study found more than a third of drivers (36%) only updated their log once a fortnight or less. This would make it almost impossible to provide an accurate record of their activity.
What’s more, if HMRC decides to do a spot check and finds records don’t match up with fuel card invoices, the penalties can be high.
Fortunately, there are better solutions. Smartphone apps can provide a much simpler solution for logging driving times and mileage. Inbuilt GPS systems offer much greater accuracy and remove the need for any manual calculations.
However, they aren’t a silver bullet. Many apps still need the driver to remember to start and stop logging for each trip and enter further details.
This means they can be subject to errors. Some free versions also don’t include useful features like integration with accounting software.
This is where the latest generation of smart technologies comes in. Tools that can fully automate the process will be the future for many businesses, as they’re highly accurate and leave drivers with nothing to worry about.
How today’s mileage tracking tools work
Today’s solutions work in a number of ways. There will typically be several options that a firm can choose from to record mileage data and ensure it’s passed on to accountancy software.
For instance, one solution is to add a small device called a beacon to your vehicles. This runs in the background and automatically records journeys from start to finish, syncing with the user’s smartphone.
This means the driver never needs to press a button. It can even tell the difference between personal and business drives.
Alternatively, a GPS dongle can be used instead of a manual smartphone app. This will also capture the details of the vehicle automatically and accurately. All the driver has to do is plug it into a laptop or PC when they login to their online tracking software.
4 key benefits for your business
So what does this mean for your business? Getting this right will provide a number of benefits that allow you to save money and boost productivity. Here are a few of the key advantages of mileage tracking solutions.
1. Reduced transport costs
First and foremost, these tools help you cut costs. A complete view of your company’s mileage allows you to identify any unnecessary journeys, avoid overestimations and improve future planning.
The effect of this can be huge. For instance, cutting the average mileage for a vehicle driving 12,000 miles a year by just 10% can lead to a £150 saving in fuel alone. Over a large fleet, this can quickly add up to a major bonus.
This is before you take into account the savings created by cutting out overestimations. Our research, for example, found the use of tracking tools reduces mileage claims by as much as 21%.
2. Less time spent on admin
Automated tools also remove the need for time-consuming manual processes to record and upload mileage details.
Our research shows more than half of drivers (54%) spend more than two hours a month submitting mileage claims. One in ten even spend more than eight hours doing them – that’s over one working day a month just spent filling in forms!
Cutting out these requirements means your employees spend time on more productive activities. It’s great for managers as well. Expenses claims can be worked out automatically, so tax deductions or reimbursements are applied without manual input.
3. Reduced emissions
A natural consequence of being able to reduce your mileage is that you’ll also cut your fleet’s emissions. This is an increasingly important consideration for many businesses, as managing your carbon footprint is a key part of any company’s social responsibility practice.
Encouraging the more efficient use of company vehicles – or dissuading workers from using their cars and making claims for personal trips – makes your fleet greener and cleaner.
4. Improved accountability
HMRC has very strict requirements for the records you have to keep regarding your vehicle’s expenses. If you’re still collecting them manually and relying on spreadsheets, it’s easy for mistakes to be made or items to be missed.
This can be very costly. If you’ve been especially lax in your record-keeping, fines could date back for years. An automated mileage data capture solution therefore ensures HMRC compliance and gives you peace of mind.back