Whenever companies allow vehicles to be used privately by employees or private vehicles that are also used for work purposes, they are all generally required to keep a good record of the mileage travelled, particularly in this case where business and private travelling need to be separated.
Apart from the risk of not fully controlling the safety and vehicle roadworthiness if it does not fully belong to the company and the difficulty in sharing responsibilities and having full control over compliance usually linked to grey fleets, companies often ignore the fact that the capturing of business mileage for tax purposes and travel and subsistence reimbursements can still constitute a risk for fleets as they could be susceptible to accusations of mileage fraud.
It seemingly isn’t unusual for companies to have inaccurate mileage despite the high risk of receiving fines. Inaccuracy in mileage recording can be due to different approaches to the logging of business or work mileage:
Rounding of mileage: legitimate journeys distances might actually be rounded in their mileage as it is easier to do due to the use of spreadsheets or manual odometer recordings, but even as a result of acting in good faith they can still draw suspicion from the authorities and constitute fraud.
Wrong business journey attribution: according to the specific legal settings, personal stops or daily commutes do not belong to business mileage and should not be grouped under the distances travelled with that purpose in the logbooks.
Sharing a business journey with all the parties involved reporting it: it might happen for some specific meetings that employees share the same vehicle on a specific occurrence but then all of them report it in their mileage capturing because of the lack of information on how to correctly do it or the lack of tools for this particular admin task.
Lack of employee knowledge: in order to correctly administer business mileage and travel and subsistence reimbursements, employees need to be aware of the proper rules of recordkeeping rather than relying on prior experience that is not founded on a solid company process. This often translates into business journeys not being reported or private ones considered business by mistake.
Massive use of spreadsheets: how many times has an error in an excel formula happened to you? Think about what might happen if drivers completely depend on spreadsheets: not only can formulas be responsible for mistakes but also typing in the wrong numbers or copying over wrong amounts.
Manual work and lack of a digital solution: this is another typical scenario where the additional issue is that financial departments and anyone else interested in fleet digital data does not have access to the crucial information that can actually help to better manage vehicles.
All the scenarios and approaches presented are quite common in fleets, but mileage claims do not necessarily have to lead to fraud. If you have tracking systems that help determine with exactitude the journeys to and from locations, along with their purpose, and organise them into reports, you can get so much more than the bare minimum that a spreadsheet offers, with the peace of mind that comes from eliminating potential legal problems arising from human error. Make sure you get in touch if you need to track your fleet journeys.
