from our UK office
Mileage costs have always been the toughest area of employee expenses to keep under control. A survey of 1,200 company drivers found that 89% admitted to making inaccurate claims.
The true scale of losses is hard to identify. So many of the falsified claims go completely undetected, causing millions of pounds to be drained from UK businesses each year.
The risk of manually processing mileage claims
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 used to manage mileage claims. Such methods included paper documents, spreadsheets, and employees having to provide distance ‘guesstimates’.
It’s a time-consuming and error-prone method that 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 like Webexpenses.
Webexpenses uses a mobile app to accurately track and record business trips, eliminating any uncertainty of manual tracking.
Different types of mileage claim fraud
Here are the most common forms of mileage claim fraud and how digital systems clamp down on the problem.
Falsifying journeys
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 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 data to show the details of a journey and a corresponding fuel receipt, a reimbursement claim can’t be made.
Exaggerating distances
This is the most common form of workplace fraud with employees routinely ’rounding up’ journey distances. With many 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 co-workers drive together to a meeting and both ask to be reimbursed for mileage. This type of fraud is hard to prevent when people are expected to be honest about their expenses.
It’s a fraud that’s unlikely to be attempted with a digital set-up. Even if both travellers recorded the journey, the 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.
