Stemming the flow of mileage expenses.
Evidence shows that organisations typically pay out 24.7% more in fuel and mileage expenses than they need to.
If your employees do business mileage – whether in company funded, or private cars – this will affect you.
How fuel prices have outstripped earnings.
The problem of over claiming business mileage affects many UK businesses and is in part linked to the historic price increases in fuel, which has risen twice as fast as average earnings, and 1.5 times faster than inflation over the past 15 years.
Wages have not increased in line with consumer price inflation since 2009 so the gap between fuel prices and disposable income has significantly widened. If an employer sets an inadequate per-per-fuel-mile rate, drivers may over claim to compensate. If the limit is too generous, then drivers may over claim to capitalise.
It’s recognised that the level of payments made to drivers has risen dramatically in line with the rising price of fuel. Many organisations remain unaware of the fact that they are hemorrhaging cash as a result of mileage over-claiming.
Over-claiming – what we don’t realise.
Drivers’ expense claims forms the basis of all the miles paid for by employers. Some of these claims can be over-exaggerated, for example ‘rounding-up’ or ‘guesstimating’
In some cases, drivers’ may deliberately set out to defraud their employer. Some examples of the tactics employed include claiming for phantom, long distance journeys or using company fuel cards to refuel cars belonging to family and friends.
At worst, drivers have been known to regularly claim up to 1,000 miles per month. In general, it is easy for claimed mileage to exceed the true level by 10-15% per month.
Organisations that use pay-and-reclaim expenses, where drivers buy their own fuel and claim a pence-per-mile rate for business journeys are the most vulnerable to over-claiming.
Over claiming – why do they get away with it?
To some drivers, ‘fiddling’ their mileage expenses is seen as a perk or easy to get away with. Most organisations have a de-centralised process for settling driver expenses. Fleet mileage expense claims are often separated from the main fleet budget.
Often, managers simply don’t have the time to manually interrogate every mileage expenses claim. It is also not easy to verify claims from drivers who regularly clock up high mileage on many and varied journeys every month.
The whole process is open for abuse without a mileage expenses capture and audit system in place.
Over-claiming – how do we stop it?
Fleetmiles uses on GPS technology to automatically capture and calculate precise locations and actual distance driven. The system automatically logs the start and end times of a journey, based on GPS measurements and pre-configured postcode data.
Drivers can access the system via a web page which is configured to ensure that all recorded journeys are for business. As an additional safeguard to driver privacy Fleetmiles also gives drivers the option of defining their journey category via a dedicated Business/Private switch in the vehicle or via a web based driver portal option, all optimized to company payroll schedules.
The newly launched Fleetmiles is a unique fleet mileage expenses management system which uses GPS technology to automatically capture business journey data with configurations which completely exclude private journey data. Unlike other systems on the market, Fleetmiles is dongle-free. The system can be fully configured to allow companies to automatically record accurate business mileage claims and reduce fuel card billing without the need for endless scrutiny or paperwork.
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