When businesses involved in deliveries, pick-ups, service calls, or sales calls have employee or contract drivers, it’s wise to take simple precautions to help reduce mileage reimbursement fraud.
While claims for mileage reimbursements might seem like small change, expense fraud committed by employees costs U.S. businesses approximately $2.8 billion per year, according to a research study conducted by Chrome River (an expense management software company).
No question, many employees are simply making honest mistakes in what they claim for mileage. But for every employee or contract driver who’s not very organized, forgets to write down mileage, or is just bad at math, there often are employees or contractors who intentionally game the system.
According to the Chrome River study of more than 1,000 people’s expense reimbursement practices, 34.5% of the people interviewed admitted to defrauding their employers by claiming additional mileage.
These fraudulent expense reimbursement claims take a hidden toll on company finances and can compromise profitability. Another research study by Oversight Systems found that expense report fraud can cost a business up to $30,000 per year. For businesses operating in industries with tight margins, that $30,000 loss could mean the difference between shutting down or staying in business.
In addition to helping businesses cut their fleet operating costs by reducing miles driven, RouteSavvy route planning software can help businesses avoid fraud potential from overstated mileage expense reports.
How RouteSavvy Helps Reduce Losses from Overstated Mileage Reimbursement Claims
RouteSavvy’s primary purpose is to generate more efficient routes, reduce miles driven, save money & improve profitability.
But there’s another benefit from route planning software that helps fleet managers assess the accuracy of mileage reimbursement claims. When RouteSavvy generates the most efficient route, the software also logs the mileage for each route.
This simple function of stating the mileage for each route allows fleet managers to compare the mileage on the route with what a driver is claiming for mileage reimbursement. If there’s a 5% difference in mileage, a fleet manager might overlook that. But if the mileage being claimed for reimbursement is significantly more than the route’s mileage, fleet managers have the information they need to question a mileage reimbursement claim from an employee or a contract delivery driver.
The universal reason why mileage reimbursement claims are overstated is that drivers claim mileage for their personal driving as well as their business driving.
RouteSavvy’s mileage logging function for each route helps nip that trend in the bud.
What’s more, once employees know that the mileage of the route they drive is clearly logged, they are much less likely to overstate their mileage reimbursement claim.
Interested in strategies to reduce mileage reimbursement fraud? Contact the RouteSavvy team for a DEMO of this powerful, affordable route planning software.