By having a clear process for reimbursing mileage and having a written record of it, you can avoid disputes down the line. Here is a recipe for paying employees for the miles they drive. Bon Appetit!
Before we get cooking, here are a few helpful hints:
- Write a policy setting due dates and rules for mileage reimbursement. Let employees know what date to turn the trackers in by, where to turn them in, and what trips they can be reimbursed for. If an employee doesn’t turn it in on time, they will have to wait until the next month’s due date.
- Use the same schedule you have set up for employee reimbursement. Make it easier on accountants by using the same due dates and check run days.
- Collect your mileage trackers in the same place as your reimbursement requests. Keep them all together so you don’t have to search when you’re ready to reimburse.
If you’re ready to cook up your own perfect process for reimbursing mileage, let’s get cooking!
Reimbursing Mileage
Essential ingredients
- Essential ingredients:
- Mileage tracker
- Pen
- Bin in your office
Optional ingredients
- Bin in your office you already use to collect reimbursement requests (reduce, reuse, recycle)
- An “approved” stamp and some ink
Directions
- Look up the IRS standard mileage reimbursement rate. In 2020 its 57.5 cents per mile for regular business driving, 17 cents per medical/moving work, and 14 cents for charity-related work.
- Download a mileage tracker and let employees have access to it.
- Instruct employees to fill out the mileage tracker at the end of each day, listing how far they drove, their car’s mileage before and after the trip, and what the trip was for.
- Collect the mileage trackers once a month.
- Look over the mileage tracker to make sure everything looks okay, then multiply the total miles traveled by the IRS standard. Write down the total amount to be repaid.
- Place the completed and signed off tracker into the AP bin so the bookkeeper can review it, input it into your AP system, and cut a check on the next check run.
At Pretty Books, we are always whipping up new and helpful ways to keep your business moving. While there are tons of ways to prepare these processes, we believe that this one is the best. Enjoy!
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