Fill Up Your Tank First Thing in the Morning

All service stations store their gasoline in underground tanks. As with all matter, gasoline expands when it’s warmed and becomes denser when it’s cool. Therefore, if you purchase gasoline in the afternoon or evening after the sun has warmed the ground, you’ll get less gas in your gallon than if you had refueled that morning, when the ground temperature was still low.

Fill Up Slowly

Looking to learn how to fill gas the right way? Could there be more to the process than unscrewing the fuel cap, putting the nozzle in the tank and fueling away? As it turns out, there is a right way and a reason for it. While getting gas probably isn’t your favorite activity, trying to speed up the process could actually reduce your gas efficiency. Applying pressure to the gasoline nozzle to fill your tank as quickly as possible turns some of the gas into vapor. All pump hoses are equipped with a vapor return that sucks vapor back into the holding tank. That means you’re charged for the gas that comes out, it vaporizes, and never actually enters your car — meaning you get less gas than you’ve paid for.

Don’t Wait Until You’re On E Before Filling Up

Gasoline begins to evaporate when it comes into contact with air, which is why gasoline storage tanks have a floating roof that serves as zero clearance between the gas and the atmosphere. Driving around with an almost empty tank makes the remaining gas evaporate more quickly. Fill your tank whenever it drops below half-full for optimal fuel efficiency.

Stay at the Speed Limit

Fuel efficiency usually decreases rapidly above 50 miles per hour (MPH). According to the U.S. Department of Energy, each 5 MPH you drive over 50 is like paying 14 cents more per gallon of gas.

Keep Your Tires Inflated

Low tire pressure increases rolling resistance. The U.S. Department of Energy estimates that properly inflated tires can improve mileage by up to 3.3%, while under-inflated tires can reduce gas mileage by 0.3% for every 1-psi drop in pressure. It’s especially important to check your tire pressure when the temperature falls. Experts advise that tires can lose 1-2 pounds of air pressure for every 10-degree drop in temperature.

If You See the Tanker Truck at the Gas Station, Turn Around

When the fuel truck refills the station’s storage tank, it can stir up any contaminates already present, such as sludge, water and dirt. If you fill up now, you will likely get contaminates with your gasoline, which affects both performance and efficiency.

Making the Most of Your Reimbursement

Every drop of gas (or lack thereof) adds up when you’re an mobile worker who is constantly on the road. Practicing these tips can help ensure you get what you pay for and you’re maximizing your reimbursements.

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1. Plan Ahead

Before you start your trip, make sure your vehicle is in good shape for travel. This is especially important for winter driving conditions. Check the weather before heading out to ensure the roads are safe to drive on. When temperatures drop significantly… well, you know what happens. Most roads freeze, making driving conditions are far from safe. Statistics show that during icy road conditions, there are 1,836 deaths, 136,309 injuries and 536,731 crashes annually. Even more alarming? The average icy road fatality count is 3.6 times the total deaths from all other weather hazards combined. If you’ve got a long drive ahead, be sure to give yourself plenty of extra time for the trip and be sure to increase your following distance. In inclement weather, it is imperative to stay alert, mind your speed, drive defensively and avoid distractions.

Packing for the Worst

If you have winter tires or chains, you might not have as much to worry about. For those who don’t, you’re going to want more than spark plugs in your trunk. No one loves the thought of sliding off an icy/snowy road, but that doesn’t mean you shouldn’t be ready for it. If you have the room in your trunk, think about stashing a few blankets, a shovel and even some non-clumping cat litter. Why all these?

First, you don’t know what kind of service you’ll have or how long you’ll be stuck. Blankets will help you retain heat through the cold. You also don’t want to be moving snow from around your tires with your windshield scraper. And digging your car out is only one part of the battle. Your tires will need traction, and cat litter will help with that.

2. Stay Fresh And Alert

Make sure you’re well-rested before a long drive. The National Highway Traffic Safety Administration (NHTSA) reports that fatalities resulting from drowsy driving rose 8.2 percent in 2021. Get home safely this holiday season. Plan your trip with another person who is able to drive if you can, and take regular breaks to avoid drowsy driving.

3. Mind Your Speed

Give yourself plenty of time and distance to react to the traffic around you. An Automotive Fleet Magazine article notes that for every one percent increase in speed, a driver’s chance of an accident increases by two percent, the chance of serious injury increases by three percent, and the chance of a fatality increases by about four percent.

4. Drive Defensively

Increased holiday traffic and winter road conditions can be frustrating. Everyone would rather be at their destination than on the roads. Some drivers forget the importance of their own safety and the safety of others. Put the safety of everyone in your car first by letting impatient and aggressive drivers pass you or go through the intersection ahead of you so that you control the situation.

5. Don’t Drive Impaired

If you plan to drink, don’t plan to drive. NHTSA’s  “Drive Sober or Get Pulled Over” campaign has set out to end drunk driving through cutting-edge technology. There’s no excuse for getting behind the wheel while under the influence. Using a designated driver or a ride-share service when you have a couple of holiday refreshments is always the safest choice.

6. Avoid Distractions

According to Distraction.gov, sending or reading a text takes your eyes off the road for five seconds. At 55 mph, that’s enough time to travel the distance of an entire football field. Driving requires your full attention. When you’re able to do so safely, pull off to the side of the road or find the nearest rest stop when you have to use your cell phone.

Times of High Travel

Whether you do or don’t believe there’s no place like home for the holidays, according to a recent survey, over 67 percent of Americans plan to travel for Thanksgiving, Christmas or both. No matter how you slice the pie, traveling is inevitable. Accidents may go hand in hand with poor weather conditions and exhaustion, but that doesn’t have to ruin your plans. We’re focused on making work life better for mobile workers. And we care about their safety during this time of year. That’s why it’s important for everyone to follow these driving tips to stay safe on the roads and have a wonderful holiday.

Discover More Driving Tips

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What is a FAVR Vehicle reimbursement plan?

FAVR, which stands for “Fixed and Variable Rate,” is a vehicle program grounded in IRS revenue procedure. It has a few different names. Some refer to it as a FAVR reimbursement plan or a FAVR mileage reimbursement. Companies can use this procedure to reimburse driving employees tax-free for both the fixed and variable costs associated with driving for business. Put simply, it is the fairest, most accurate and most cost-effective way to reimburse driving employees who use their own vehicles for work. 

Fixed and Variable Costs

As mentioned above, the FAVR vehicle reimbursement plan is divided into two costs: fixed costs and variable costs. What makes a cost fixed and what makes a cost variable? Let’s take a closer look at each.   

Fixed Costs 

Driving employees pay for insurance premiums, registration and license fees, depreciation and taxes. These are considered fixed costs because they do not fluctuate frequently. 

But the costs of driving a personal vehicle for business go well beyond the fixed costs of insurance and registration. That’s where variable costs come in.  

Variable Costs 

Variable costs included expenses related to actually driving a car. Perhaps the most noticeable day-to-day cost for driving employees is filling the gas tank. They also pay for the variable costs, like fuel, maintenance, tires and oil. Each of these costs fluctuates more regularly than the fixed costs of insurance premiums and vehicle registration. They also change based on the amount of mileage driven. Lower mileage drivers won’t need to have their oil changed or tires replaced as frequently as higher mileage drivers.  

It’s easy to see the difference between the fixed and variable costs. One is the cost of simply owning a vehicle. The other is the cost of actually driving that car. Recognizing that, the separation of FAVR reimbursements into two separate rates makes sense. And it‘s pretty simple, right? 

Geographic Variances

Well, to complicate things a bit, both fixed and variable costs can vary greatly depending on an employee’s location. Here’s an example. Yearly vehicle property taxes are not the same in every state. In Virginia, for example, property taxes average $962. Now look at the average in Montana, which is just $85. That’s an $877 difference per year. And that is only the vehicle property tax.  

If you consider other vehicle costs, the impact of geographic variances grows to be even more substantial. Insurance premiums vary widely, from as much as $2,476 in Michigan to $805 in Maine (a $1,671 difference). Registration fees also differ by state, costing just $14 in Mississippi yet $101 in Illinois.  

But one of the biggest factors, of course, is the price of fuel. Gas prices don’t only vary from state to state, but also from city to city and day to day. These differences in cost can become an administrative nightmare for companies with a widely-dispersed driving workforce to track. With FAVR, an employee’s reimbursement also considers their geographic location. As shown above, when you have employees in multiple states, their driving costs can vary quite drastically. FAVR makes reimbursements fair and accurate.  

Where Other Programs Fall Short 

It is entirely possible for a company to have the right vehicle program without implementing FAVR. However, more often than not, companies maintain their current vehicle program because they’re unaware of alternatives and the benefits they may provide. What does the FAVR vehicle reimbursement plan have over these programs? Let’s go program by program. 

Company-Provided Vehicle Program or Fleet 

Companies may choose to purchase or lease a fleet of vehicles to control their image and appeal to potential recruits. However, there’s a reason company-provided vehicle programs are the most expensive. Fleet vehicles require considerable maintenance, and turnover in the driving employee base means vehicles frequently sit idle. Fuel cards are another expensive piece of the fleet program, especially when employees are permitted to drive their business vehicle for personal reasons. However, the biggest issue with fleet vehicles is liability in the event of an accident. 

With a FAVR vehicle reimbursement plan, companies avoid the costs of supporting fuel and maintenance for a fleet of vehicles. FAVR programs are flexible to the economy. Companies can scale up or down without worrying about idle vehicle costs. FAVR programs also mitigate the risk of company liability in the event of a vehicle accident.  

Car Allowance or Vehicle Allowance 

Companies may offer a monthly stipend, referred to as a car allowance or vehicle allowance, to pay employees for the business use of their personal vehicles. It’s an easy program to set up and the cost is dependable. However, when car allowances aren’t attributed to mileage, the IRS taxes them as additional income. That means companies pay more and employees receive less. 

With the right vendor, companies can implement a FAVR vehicle reimbursement plan that makes the capturing of mileage as easy as opening an app and driving to the destination. In addition to being fair and accurate, FAVR vehicle reimbursements are tax free.

Mileage Reimbursement or Cents-Per-Mile 

Companies may offer a mileage reimbursement, often at the current IRS mileage rate, to employees driving their personal vehicles for business reasons. This program is fairly easy to administer across a wide driver base. It is also non-taxable as employees submit mileage logs of each trip to receive their reimbursements. However, mileage reimbursement programs are best for a small, regional driver pool that drives an average of 500 miles each month. Mileage reimbursement rates do not take into account the costs of vehicle ownership specific to an employee’s area. Furthermore, with manual mileage logs, employers are exposed to mileage fraud, an issue that adds up quickly. 

As shared earlier, FAVR reimburses employees for the costs specific to their location. And, with the right provider, employees can easily capture mileage through an app. That means no more wasting time manually tracking mileage and mitigated risk of mileage fraud.  

FAVR Mileage Reimbursement: A Recruiting and Retention Benefit

Because the FAVR vehicle reimbursement plan is fair and accurate, companies can leverage it in recruiting and retention efforts. Businesses will often offer company-provided vehicles or car allowances as benefits or compensation. However, fleet vehicles are not the draw for employees they used to be, and that doesn’t even get into the increased expense and risk a fleet program poses. Similarly, car allowances aren’t compensation, as they frequently fail to cover the expenses of driving a personal vehicle for business purposes.

Qualifying for FAVR

While FAVR may be the right choice for a lot of companies, it might not be the right fit for yours. It’s not a question of the number of driving employees in your mobile workforce. However, to qualify for FAVR, employees must drive a minimum of 5,000 miles each year. Whether that only applies to one subset of your mobile workforce, or doesn’t line up at all, your company has other options.

The Motus Platform 

We’ve shared what makes the FAVR reimbursement program so great. It’s the only IRS-approved option. It’s highly configurable, which means organizations can adjust payments within the IRS guidelines to create tax-free reimbursements. That adaptability means reimbursements can be adjusted to whatever economic situation. But FAVR is a challenge to duplicate in house. Most companies using FAVR outsource it to companies like ours. So what sets Motus apart? Let’s start with the Motus Platform.   

The Motus platform powers our solutions, using millions of data points to create accurate reimbursement calculations. Basically, it makes vehicle programs convenient for drivers and simple for employers and administrators. How does that play out? The platform streamlines vehicle program management and compliance with IRS requirements. It also enables employers to customize tax-free reimbursement rates that align to job role needs, employee’s location costs and account for miles driven.  

Ease of Management 

Whether your mobile workforce is five drivers or 5,000, the Motus platform provides all the tools you need to streamline management of a FAVR program. Thousands of companies efficiently and frictionlessly manage their programs using those tools and guidelines. The platform offers streamlined exception management workflows, dashboards on key aspects and program health and helpful reminders for upcoming deadlines. Through the Motus Platform, a single person can manage hundreds of drivers. 

We understand a good reimbursement solution isn’t just about what you can do with it, but how easy it is. That’s why we’ve focused so much into simplifying the approval process. We provide convenient approval workflows, configurable to any team. These workflows can be configured for multiple approvals or a single approver. Reviewers can choose how to approve mileage, either in batches or by individual trips. Admins can also delegate approval responsibility to other team members for as long as necessary. Additionally, these workflows enhance the approver experience, improving insight into reporting to ensure drivers don’t miss their reimbursement if an approver is out.   

The Motus App 

The Motus app is a one-stop for any driver’s reimbursement needs. In less than 10 minutes each month, they can accomplish everything they need to. The app offers guided workflows that simplify setting up. It also offers several options for reporting miles, including automatic mileage capture for trips outside of business hours. The process to review trips in the app is quick and in-app notifications help employees meet deadlines and receive maximum reimbursement amounts. Finally, employees can view their reimbursement rates and history any time in the app or their user portal.   

Reliable Payments 

Processing more than $2 Billion in reimbursements each year, it’s no wonder Motus is a leader in reliable payments. Beyond being reliable, we also offer payment options to meet the needs of companies across industries and sizes. Our payments can integrate directly to any payroll system, or we export approved reimbursements for a payroll system. We can also push expense claims to Concur or other T&E partner, or directly deposit payments to employees for you.  

Implementing FAVR Mileage Reimbursement

With the right vendor, FAVR mileage reimbursement can simplify manual processes with automation, ensure compliance and provide accurate payments, all while controlling costs. Motus works with companies to deliver a frictionless reimbursement experience tailored to role, business use and location. With guided workflows and easy submission, the Motus app makes mileage capture easy for employees. And the configurable rates and in-depth reports of our platform provides administrators with powerful yet simple tools to monitor and manage their program. Interested in learning more? Check out our FAVR offering.

Learn More Here

The post What is a FAVR Vehicle Reimbursement Plan? appeared first on Motus.

How does Motus help mobile workers? 

A big part of any business is its employees. By doing their jobs, the people who work for the company make the company. That includes the company’s mobile workforce, the ones driving as part of their job role. How can a vehicle reimbursement program with Motus improve their lives? By improving productivity, providing flexibility, ensuring fair and accurate reimbursements and more.  

Productivity 

Recording business miles is essential to accurate reimbursement. Recording miles manually not only takes time, but can lead to issues with mileage fraud and possible IRS audits. Motus provides automated mileage capture, making recording business mileage simple. Once enabled, mobile workers can simply start driving. When the trip is complete, they can add any other necessary information and submit it easily. With automated mileage capture, employees get valuable time back in their day.   

Fair and Accurate Reimbursement 

Sometimes a vehicle reimbursement program fails to reimburse mobile workers accurately. With car allowances, there’s tax waste and a one-size-fits-all approach. Mileage reimbursement can run into the same one-size-fits-all issue. With Motus, your company can choose the types of vehicle programs to run. Our team will calculate rates that match program parameters, while also accurately reimbursing your employees. When paired with accurate mileage capture, reimbursements are stronger than ever.

Driver Safety 

Employee safety is essential. While everyone can agree with that, too many companies aren’t doing enough to protect their employees. A truly comprehensive vehicle program isn’t just about reacting when an employee is found at fault in an accident. Motus Drive Safe can cover the bases of motor vehicle record (MVR) reporting, insurance verification and driver assessment and safety training modules. This means a driver safety program that isn’t just reactive, but proactive too.

How does Motus help companies with their vehicle reimbursement programs? 

We’ve shared some of the ways a vehicle reimbursement program with Motus can help mobile workers. But what can Motus do for the company itself? From cost control and risk mitigation to increased insight and scalability, Motus solutions tackle the challenges you face with your current vehicle reimbursement program today. Let’s dive into the benefits of working with Motus. 

Cost Control 

A big reason customers partner with Motus is to control costs. They might have capital tied up in their fleet program and no insight into rampant fuel spend. Or they have a considerable amount of tax waste from their car allowance program. Or high mileage drivers and possible mileage fraud are making them rethink their mileage reimbursement program.  

Motus vehicle program solutions help companies make the right reimbursements, without concerns of mileage fraud or tax waste. Using the Motus Platform, the Motus team works with your company to calculate rates beneficial to the business and its mobile workers. The Motus app also helps cut down on costs. Automated mileage capture creates up to 20% savings compared to self-reported mileage.  

But the costs of inaccurate reimbursements, tax waste and mileage fraud are only some of the financial burden a company faces. 

Risk Mitigation 

Vehicle programs can expose companies to considerable risk. Personal-use exposes companies with fleet vehicles to legal risk. Failure to reimburse employees enough can also lead to lawsuit. Programs without IRS-compliant mileage logs expose companies to audit risk. And, as mentioned above, driver safety is also a big area of risk for many companies. 

Motus vehicle program solutions help companies by limiting off-hours corporate exposure to accidents. We also verify drivers insurance and the level of coverage to ensure it meets company policy. When calculating rates, we consider all factors to ensure accuracy and fairness, avoiding potential lawsuit risk. Finally, we have a robust safety offering to get your company’s driver safety program where it needs to be. 

Increased Insight 

Some companies that don’t have insight into their mobile workforce simply don’t know what they’re missing. For others, it’s a top priority. From fleet programs to mileage reimbursement programs, administrators want to better understand how their mobile workers operate. That’s where Motus comes in. 

The Motus Platform enables administrators with the tools and tech they need. With its high level of automation, every aspect of mileage reimbursement becomes simple – whether you have 5 drivers or 5,000. Our powerful reporting capabilities mean companies gain insight into field activities. Whether its double checking high mileage driver activity or looking for route optimization opportunities, the Motus Platform delivers.  

Scalability 

Businesses grow and shrink. The more adaptable they are when the economy shifts, the better. That applies to their vehicle reimbursement program as well. That poses a bigger problem for some vehicle programs than others. For instance, a fleet program that needs to downsize means working through offloading a number of cars, or paying for idle, depreciating assets. Motus understands scalability is key. 

With Motus, we work with you to create an adaptable vehicle program. Something as sudden as a hike in gas prices could result in an adjustment in reimbursement rates. Whatever the economy, we work to ensure you continue to provide fair and accurate reimbursements.  

Have more than one vehicle program? Motus makes managing multiple vehicle programs at the same time that much easier. From accountable allowances to mileage reimbursements to fixed and variable rate reimbursements, admins can view them all in the same platform. 

Payments 

Payments. At the end of the day, its what vehicle reimbursement programs are all about. Your employees drove their personal vehicles for work, they should be reimbursed accurately and in a timely manner. When payments don’t go through, or there’s a problem with the system, it’s a bad day for everyone: drivers, managers, administrators, everyone. Companies need a system they can rely on.  

Motus is a leader in reliable payments. What does that mean? It means we process over $2 billion in reimbursements for our customers each year. It also means we work to meet the needs of your company. We can integrate directly into a payroll system, export an approved reimbursement report for a payroll system, push the expense claims through Concur or another T&E partner or we can make the reimbursement payments to the mobile workers via direct deposit.   

The Bottom Line

In the past, reimbursing employees who drove for business was a daunting process. Thanks to advances in software and mobile technologies, it is now easier than ever. 

The Motus Platform and Motus app automate all areas of your vehicle reimbursement program, from business mileage reporting in the field to the reimbursement process. We designed our platform to increase accuracy, boost efficiency and share cost savings every step of the way. Business mileage data also provides greater visibility into your mobile workforce, allowing you to optimize driving patterns and improve procedures. 

With more employees entering the mobile workforce each day, the need for a fully automated reimbursement platform has never been greater. Interested in learning more about how Motus helps companies with their vehicle reimbursement programs? Reach out to connect with a member of our team today! 

Contact Us

The post How Your Business Can Benefit from Motus’ Vehicle Reimbursement Program appeared first on Motus.

Outsourcing Your Delivery

Outsourcing delivery means that a restaurant or store contracts with a third party on-demand delivery services provider to pick up a dinner order, or groceries, or a new stove and deliver it over what is commonly referred to as “the last mile” – i.e., to the doorstep of the purchasing consumer.

For some businesses, outsourcing delivery is an easy decision – you get the benefits of having goods delivered directly to your customers, without the hassle of either creating your own delivery operation or empowering employees to use their own vehicles to bring goods to customers. In addition to that, you’re able to grow your delivery radius and business presence, keep overhead costs down, reduce talent acquisition costs by plugging into an on-demand network, and manage the ebbs and flows of business (i.e. peak times of delivery vs. slow times). In addition, you don’t have to worry about reimbursing these 1099 workers for all the business expenses they incur on the job.

If you choose to outsource delivery, there are also some potential risks that you’ll have to recognize. Outsourcing to a third party puts your products – and your company’s reputation – in the hands of someone else. When a customer receives goods that are damaged, gets the wrong food order, or has a negative experience with a grumpy delivery driver, those negatives will be attached to your brand – regardless of whether you had anything to do with it or not. You lose control and have to place trust in your outsourcing partner to care about your brand as much as you do. With outsourcers often handling several brands at once, it’s hard to guarantee that they will. It’s important to keep this in mind as you evaluate your options.

There will always be instances where late deliveries occur, and with outsourced delivery, you lose the insight and control to make changes and improvements if there are late deliveries. The only way to guarantee on-time delivery is to write certain requirements into a contract. This is another consideration to factor into your search for an outsourced delivery provider.

Employing Delivery Drivers

The other option for companies is to own their delivery services operation. This could take two forms: if your company requires specialty vehicles and must uphold brand standards, you could set up your own fleet of delivery vehicles; or you could have your employees use their own personal vehicles to deliver goods, offering up the IRS Safe Harbor rate or a personalized rate specific to each employee.

The expense and workforce needed to create and manage a fleet of company-owned vehicles and employees makes this option only sensible for companies that require specialty vehicles. Most companies find themselves leaning toward personal use of vehicles to make deliveries.

It’s important for companies in this situation, however, to remember that delivery drivers are required by state and federal labor laws to be accurately reimbursed for the business use of their personal vehicles. This means gas and general maintenance of the vehicle. Several companies that have not accurately reimbursed employees have found themselves involved in expensive class-action lawsuits.

The benefit of this approach is that you retain control over how your company is perceived. You also set the standard for customer service and how delivery workers interact with customers, keeping the entire process true to your brand. An issue that has been raised for companies using this model has been ensuring that workers are reimbursed fairly and accurately.

Today’s technology solutions, however, have made it easier than ever to reimburse accurately.

Which Option is Right For You?

If your business is a fit for the outsourced delivery model, there are third-party providers available to help you achieve your delivery goals without having to employ drivers. For companies with multiple store locations who want to keep their delivery operations in-house, there’s technology to help you accurately reimburse your drivers, which is becoming increasingly important.

The growing market demand for delivery services has increased awareness around how delivery drivers are being reimbursed for their business mileage. The previous method of reimbursement – giving drivers a few extra dollars to pay for expenses – was considered “better than nothing,” but still falls far short in terms of fair and accurate reimbursement. As a result, there’s more pressure on store owners to implement a labor-compliant, cost-effective mileage reimbursement solution for their delivery drivers.

Businesses that decide to keep delivery in-house need a solution that tracks the true costs and expenses that employees incur and reimburses them that actual amount.

With the Motus Delivery Rates solution, store owners get custom mileage reimbursement rates that cater to the unique needs of the delivery industry. Motus incorporates both fixed costs – constant costs each month, including insurance premiums, license and registration fees, taxes and depreciation; and variable costs – which vary month over month and include gas, oil, vehicle maintenance and tire wear. The rates calculated by Motus reflect real-time costs customized to each store location, giving companies an automated, labor-compliant mileage reimbursement program.

Want to find out how the Motus Delivery Rates solution can help your organization?

Learn More About Motus Delivery Rates

The post Restaurant Delivery in the On-Demand Economy: What Are Your Options? appeared first on Motus.

To further complicate matters, wasteful reimbursement strategies have become common practice for many organizations. Over the past eleven years, we’ve found that offering fair, accurate, and IRS-compliant reimbursement programs can save companies significantly. On average, we save our clients $3,000 per year for each mobile employee through our fixed and variable rate (FAVR) reimbursement program. Want to know how? Read on.

What’s So Complicated About Reimbursement?

We can all agree that organizations should only reimburse their workers for incurred business expenses. Doing so is not only financially responsible; it is also fair to both employers and employees. No company in their right mind would reimburse an employee $50 for a meal receipt showing it cost $42.98, right?

However, many companies do just that with their vehicle reimbursements, inadvertently treating them as disguised compensation programs. Employees who are overpaid for travel are treated to a kind of “back-door” bonus. Data and detailed records are typically required to prove actual expenses in all other aspects of a business (meals, hotels, airfare, to name a few), but many vehicle reimbursement programs pay all employees a flat rate or monthly dollar amount, regardless of the costs each employee actually incurred.

These programs are far from perfect. Quite far, in fact. They can actively deter (for those getting a car allowance) or incentivize driving (for those getting a cents-per-mile reimbursement) in order to inflate those travel “bonuses”. In fact, many have heard the saying “If you can’t sell, drive!”, in reference to cents-per-mile reimbursement programs, which over-reimburse employees when they drive higher mileage.

Which Vehicle Reimbursement Program is Right for Me?

Fixed and variable rate (FAVR) reimbursement programs, like those Motus administers, take the many costs of vehicle operation into consideration when reimbursing workers. Unfortunately, many employers are unfamiliar with FAVR and instead resort to a flat, monthly car allowance ($300 a month for all workers, for example), the IRS mileage rate, or a custom cents-per-mile program.

Flat, one-size-fits-all reimbursements based on average costs, like car allowances and cents-per-mile programs (including the IRS mileage rate), almost certainly over-reimburse some employees and may under-reimburse others. One need not look further than the variation in fuel prices across the United States to understand that the costs of owning and operating a vehicle vary dramatically from state to state as well as city to city. Our own research shows that the cost differences can be huge.

Motus saves our clients $3,000 per driver per year, on average, when they transition to a fair and accurate FAVR program. Only FAVR vehicle reimbursement programs account for geographical and driving behavior cost differences when calculating an individual’s reimbursement amount.

FAVR programs enable employers to reimburse their drivers based on their unique costs to operate their vehicle for business as opposed to a generalized or flat assumption of their costs. In a nutshell, accuracy is what enables our partners to realize savings and ensure that they (and their employees) are IRS-compliant. Want to learn more? Take a look at our free report, which highlights the risks to employers with respect to the IRS and Labor Codes in certain states, like California.

The Bottom Line

Accurately reimbursing your workers who drive for business has a significant and direct impact on employee behavior (and morale), but also on your bottom line. As the workforce continues to mobilize, it is fast becoming a necessity.

We’ve found that, on average, companies save $3,000 per employee each year when transitioning to an accurate FAVR vehicle reimbursement program. Of course, the inverse is true: until you begin fairly and accurately reimbursing your workers, you may be throwing $3,000 out the window each year for every single employee who drives for your business.

Try explaining that to your CFO.

The post How Motus Can Save You $3,000 Per Employee Each Year appeared first on Motus.