How a Mileage App Works for Small Business Expense Tracking

If you are someone regularly reimbursing, approving, or going through the mileage expenses, then you know how important it is to have a dependable mileage tracking app.

It helps with the reimbursement and tax deductions and makes the process simple. So, if you think you have to shift to a mileage-tracking app or make the process simple and not deal with all the manual effort, then this article is for you. 

How Does a Mileage Tracking App Work?

A mileage tracking app automates the entire mileage logging process, ensuring businesses never miss a deductible mile or overpay on reimbursements. Here’s how a mileage app simplifies expense tracking:

1. Automatic GPS Tracking

If you have a mileage tracking app, it will automatically detect when the trip is starting and when it is ending. It will automatically use GPS tracking. It makes sure that there is data for every mile that has been driven for business without needing any manual input from the driver.

2. Real-Time Trip Categorization

Once you have logged the trip, there are options for users to categorize it as charity, business, personal, or medical. Some apps also allow businesses ti set categories for different teams, projects and clients.

3. Cloud Backup and Secure Storage

A mileage tracking app makes sure that it keeps a record of it securely in the cloud. There is no chance of losing data because of misplaced logs, lost spreadsheets, or damaged notebooks.

4. Easy Report Generation

Businesses generate detailed reports in just a few clicks. The reports include trip purpose, date, time, and distance traveled. This is the best way for tax filing, employee reimbursements and audits.

5. Integration with Expense Management Systems

Some of the best mileage apps use financial tools and allow businesses to sync the mileage data with payroll systems, expense reports, and invoices for effortless accounting.

Key Features to Look for in a Mileage Tracking App

Not all mileage apps offer the same functionality. When choosing the best one for your business, consider the following features:

1. Automatic Trip Detection

A top-rated mileage app should track trips automatically using GPS, eliminating the need for manual logging.

2. IRS-Compliant Mileage Reports

To ensure compliance, the app should provide detailed, IRS-approved mileage reports that include date, trip purpose, and mileage totals.

3. Easy Employee Onboarding

If your business has multiple drivers, choose a mileage tracker app that allows easy onboarding and multi-user tracking.

4. Manual Entry Option

Sometimes, automatic tracking may miss a trip due to GPS issues. A good mileage app should allow users to add or edit trips manually when needed.

5. Cloud Storage and Data Security

Look for an app that offers cloud backup to prevent data loss and ensures that mileage records are secure and accessible from multiple devices.

6. Customizable Reimbursement Rates

Some businesses may use different mileage reimbursement rates than the IRS standard. Choose a mileage tracking app that lets you set custom reimbursement rates based on company policies.

How to Implement a Mileage App in Your Small Business

Mileage tracking apps can help a small business in various ways. There are ways in which it can improve operations and relieve the employees of certain duties. Let’s check how to implement this app in your small business.

Step 1: Choose the Right Mileage Tracking App

Check different mileage tracking apps depending on different features integration capabilities and pricing. Find apps that align with the mileage tracking needs of your business.

Step 2: Train Employees on How to Use the App

Once you have chosen a mileage app, arrange a training session for your employees. Make sure they know how to start the app, categorize the trips, and submit reports for reimbursements.

Step 3: Set Up Reimbursement Policies

Define the mileage reimbursement policies clearly. This should include the trips that qualify for reimbursements and how often the employees would have to submit their reports.

Step 4: Integrate with Accounting Software

Sync the mileage app with the expense management or payroll system to make automatic reimbursements and streamline tax reporting.

Step 5: Regularly Review Mileage Reports

Accountants and business owners have to go through the mileage reports monthly and verify its accuracy, make sure of compliance and identify discrepancies.

Common Mistakes to Avoid When Using a Mileage App

There are certain mistakes that people often make when using a mileage tracking app. Here are some of the common mistakes that people should avoid.

1. Not Reviewing Reports Regularly

Failing to audit mileage reports may lead to missed deductions or overpayment of reimbursements.

2. Forgetting to Categorize Trips

Always separate business and personal trips to prevent incorrect tax filings.

3. Ignoring App Settings and Updates

Many mileage tracking apps introduce new features or security updates. Keeping your app updated ensures optimal performance.

4. Not Backing Up Data

Make sure your mileage app offers cloud backup to prevent data loss in case of a phone failure.

What Are Some Mileage Tracking Apps That You Can Use For Your Business?

Some of the best mileage tracking apps that you can use for your small business are listed below:

• Fyle
• TripLog
• Hurdlr
• MileIQ
• Everlance

Conclusion

For small businesses, you must automate the tracking of expenses with a mileage app. It is a game changer. 

A mileage tracking app can reduce manual error, improve financial accuracy, and make sure that businesses maximize the deduction of taxes while simplifying the reimbursement process.

When you choose the right mileage app, train employees, and use it with the accounting software, your business can make operations simple while focusing on growth and reducing administrative burdens.

If you are not using a mileage tracker app for your business, then it is time to start using one. It will save you a lot of time, minimize deductions and make your expense tracking simple today.

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