Mileage costs have always been the toughest area of employee expenses to keep under control. A 2014 survey of 1,200 company drivers found that 89 percent admitted to making inaccurate claims.
The true scale of losses is hard to identify as so many of the falsified and exaggerated claims go completely undetected, causing millions of pounds to be drained from the UK businesses each year.
Even seemingly trivial ‘additions’ employees may make to their mileage become serious losses when multiplied by the number of employees and the multitude of journeys they make annually.
This kind of drain on resources is a legacy of the traditional ways that companies have used to manage mileage claims - with paper documents, spreadsheets and employees having to provide distance ‘guesstimates’.
It’s a time consuming and error-prone method which makes it virtually impossible for finance teams to properly monitor and police their employees travel costs. It’s the reason so many businesses are now moving over to digital systems.
With a digital system such as webexpenses, a smartphone app is used to track and record the exact route and distance of any business related road journey, removing all of the ambiguities of a paper-based set-up.
Here’s a look at the most common forms of mileage claim fraud and how digital systems are clamping down on the problem:
With a paper-based system an employee can easily claim for journeys they’ve never made. As long as the details of a journey look legitimate and the distances claimed appear to be accurate, there’s little a finance professional can do to verify if it actually happened.
Indeed, there are even examples of companies allowing their employees to falsify mileage claims as a kind of unofficial bonus scheme. With these types of attitudes, it’s hardly surprising that so many employees view it as an ‘acceptable’ form of fraud.
With a digital system, it’s simply not possible. Without the data to show when and where a journey has taken place and a corresponding fuel receipt to cover the time-period, a reimbursement claim can’t be made.
This is the most common form of workplace fraud with employees routinely ‘rounding up’ journey distances. With a multitude of different ways to go from A to B, it’s incredibly difficult, and time consuming, to accurately check this.
A digital system records distances to within meter accuracy. It provides data, not only on the exact distance travelled, but also on the route taken.
Merging personal and business expenses
With an increasingly mobile workforce, the line between personal and work activities is becoming ever more blurred. It’s something that traditional mileage expense methods have struggled to handle, with no easy way to identify the purpose of a journey.
It’s a particular problem for those companies that provide fuel cards to their employees, typically increasing the tendency for workers to claim personal mileage as a business cost.
The accurate data provided by a digital system allows finance teams to untangle the personal and business elements of travel. If a business trip includes a lengthy detour to visit a relative, it’s shown in the mileage claim data.
Claiming for shared journeys
Two colleagues share a car ride to a conference but each submits a separate claim for mileage costs. It’s a common form of fraud which businesses have been able to do very little about when relying on employees to provide information.
It’s a fraud that’s unlikely to be attempted with a digital set-up. Even if both of the travellers recorded the journey, the smartphone app data would show the travel times and route to be identical.
And it’s not just workplace fraud that digital systems are helping to tackle, it’s also the genuine errors and inefficiencies that result from traditional management of mileage.
Webexpenses provides a smarter way to manage and monitor employee costs. Find out how it can help your business to regain control of mileage claims by requesting a demo.