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Torben Robertson

4 mins

Why companies need software for mileage reimbursements

Cloud software is necessary for administrators and managers of mileage reimbursement programs to run their payroll and maintain IRS compliance.


How software helps with mileage reimbursements

Cloud software is an important time-saving tool for managers of mileage reimbursement programs. The right program gives administrators an easy way to review and approve the mileage captured by a mileage app.

It also gives companies, drivers, and admins access to data and insights that help everyone make more intelligent business-driving decisions.

Last but not least, cloud software stores the data companies need to justify their compliance with IRS regulations for business driving, thereby keeping their reimbursement programs tax-free.

What is cloud management software, as it relates to mileage reimbursement programs?

A cloud management program is an administrative tool, rich with data, that allows you to manage aspects of your mileage reimbursement program. Such a software product is best paired with a mobile mileage capture app, since that is how mileage data is transferred to the cloud.

In a proper cloud platform, you will be able to do things like:

– approve driver mileage logs;
– see the details of your company vehicle program;
– add new drivers and remove those that have exited the program.

Who uses cloud software?

Aside from managers and administrators, drivers are also able to use a VRP cloud. Drivers are able to see program details relevant to them.

Mileage reimbursement programs involve a variety of complex moving parts, including tax-compliance measures and insurance verification. Drivers are able to see, for example, whether their business driving is compliant with IRS regulations for business programs, and whether their insurance coverage is sufficient for business driving.

You can learn more about business use insurance here!

How does VRP cloud software impact IRS compliance measures?

With a proper cloud platform, you have everything you need to justify the fact that your drivers are doing legitimate business mileage. Depending on your mileage reimbursement program, the IRS has different compliance measures.

To prove that your program adheres to these compliance measures, detailed record-keeping is required. A VRP cloud works together with a mileage app to produce and store these records. Cardata Cloud fulfills all the reporting requirements of the IRS, and stores the records businesses need for easy access.

What are the tax implications of this software?

Both employees and employers see their tax burdens reduced when they implement a VRP cloud. Cardata Cloud allows employees to justify their reimbursements, remain compliant, and drive tax-free.

Other programs, like traditional car allowances, are by definition not justified with this kind of software (or with anything else, for that matter).

Yet even with programs that are justifiable in the eyes of the IRS, not using software leaves companies open to errors. If a company is not using a mileage app and a cloud platform, drivers are using manual mileage logs, and administrators are attempting to justify a tax-free program with a shoebox of receipts.

Errors in reporting can leave companies open to entirely avoidable tax waste. Cloud and app systems eliminate this risk. Cardata Cloud software allows employers to justify their reimbursements and keep their program tax-free

What can software tell employers about mileage expenses?

Cloud management software lets employers see what they’re spending money on, by providing data about all relevant payments. Having access to this data lets employers make intelligent decisions about the future of their business vehicle programs.

What about employee vehicle expenses?

Cloud management software allows employees to see what they are being paid for, and how much their fixed and variable reimbursements are. All mileage reimbursement programs offer some combination of fixed and variable payments. Fixed reimbursements cover expenses that do not change based on miles driven, like insurance. Variable reimbursements cover expenses that do change based on miles driven, like fuel and repairs.

For drivers, seeing expense and reimbursement data is important. It allows them to make smart decisions about their personal driving habits, in relation to what they are being paid for business driving. Having access to driving data could, for example, intelligently influence what kind of car they purchase in the future.

Will administrators and drivers save time?

Absolutely. Administrators, with Cloud, have simple monthly approval workflows. They no longer need to chase down expense reports and shoeboxes of receipts. What is more, managers can seamlessly add new drivers as they join the company—onboarding them, and centralizing all the data relevant to their participation in the VRP.

Who has the best VRP cloud software?

Cardata offers some of the best software in the space. For proof, take our recent G2 software award. We won a place in the Top 50 Accounting and Finance Products. We are the only VRP Cloud and App product to have made that list. Book a demo now to see it!

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