Fleet management comes with a lot of paperwork—CDL licenses, training, inspections, hours of service (HOS), mileage, etc. All of this paperwork is required for compliance with regulations. However, tracking certain numbers, such as mileage, is more beneficial to your fleet than it is for any reporting agency. Your mileage does matter, in regards to calculating your CSA score, but it also matters when filing taxes and calculating tax deductions. Every business seeks opportunities for deductions. For fleets, one of the easiest deductions is mileage. To make sure you’re reporting mileage correctly your drivers should keep a mileage log. Below is everything you need to know about keeping a mileage log.
A mileage log is a meticulous record of the mileage driven in each vehicle, which sounds simple enough. However, many fleet companies feel it’s adequate to record mileage every week or month, but these records would not suffice for an IRS audit. The IRS needs a clear view of your operating expenses, including mileage. To do that, you need to record mileage for every single trip. This may sound tedious, but the right tools, such as a telematics system, can help by automatically recording this data and storing it in a centralized database.
There are very few requirements for mileage tracking by the IRS for tax purposes. The priority in mileage logging is that you log the mileage of each trip, for each vehicle. The IRS does have eligibility requirements for claiming mileage such as the type of business. You also cannot claim mileage incurred during personal use of the vehicle. This can be confusing for fleet drivers that take their vehicles home each day. You have to differentiate between the miles they put on the vehicle for work and commuting miles.
Along with mileage you should also record:
It can be difficult to record all of this for each trip, especially for fleets. Mileage logging apps or certain fleet management software makes this task much easier.
Many businesses simply estimate the mileage they use for their business. This works well enough for many, but it opens companies up to a greater risk if they’re audited by the IRS. In the case of an audit, you need to have detailed records of your mileage. There are even lawsuits in which the taxpayer lost years of deductions due to improper record keeping of mileage (Royster vs. Commissioner).
While it may not seem likely that you’ll face an audit, know that it is possible and you may face deduction losses. Sole proprietors face a higher risk of audit due to a lack of separation between personal miles and business miles. It is one of the most commonly scrutinized deductions for businesses, and it’s better to be prepared than not.
There are two types of deductions relating to mileage tracking: standard or actual expense deductions. The standard deduction is determined by the IRS, which was 58 cents per mile in 2019. The actual is input by the taxpayer. This would include detailed information about mileage, expenses, and records to support both.
As mentioned, the standard deduction is a preset deduction. When you use this deduction, you don’t get the option to deduct other expenses such as repairs, depreciation, and registration fees. This is generally a good option for individuals that travel for business in their personal vehicles, such as Uber drivers. But for large fleets, or for fleets that don’t use their vehicles for other purposes, they may not get their full deduction from this option.
The actual expense deduction allows you to calculate in your mileage, lease payments, fuel, registration fees, depreciation, maintenance, and more into your tax filings. With this method, you would calculate the total vehicle expenses and multiple it by the miles driven for business to find your total deduction.
Surprisingly, this is a common occurrence, especially among those new to using their vehicle for business. New fleets aren’t always accustomed to tracking mileage like expert drivers would be. Taking the standard deduction in these instances is generally advised. With the standard deduction, you can estimate your mileage out of your total vehicle costs.
It’s a different story for fleets with vehicles they use only for business purposes. If you didn’t log your mileage, consider taking the standard deduction and making estimates with what little evidence you have. Here are the steps you can take:
For the future, you should use a mileage tracking app, GPS tracking device that logs Hours of Service (HOS), or a total fleet management system. A full system will not only log your HOS, but it will also log and optimize other parts of your business and store this data in a centralized database. This makes it easier to recall the data you need, when you need it.
An IRS audit is something that no business wants to encounter, and if your business lacks the proper documentation, you may lose years of deductions. So, while there are few actual rules about logging your mileage, there are still guidelines you should follow. To keep a mileage log book with the proper information, you need to be as strict with your recordkeeping as the IRS would be in an audit.
To reap the full benefits of an IRS mileage deductible, your records must have the following information:
Many fleets like to store this information in a notebook to update by hand, or utilize an Excel spreadsheet. Options like these were the norm before the integration of fleet management software. No matter how you record this information, it’s vital that you do so for each trip and that the records are as detailed as possible. You must also keep these records for at least three years. Here’s what you need to do to accurately report your mileage to the IRS:
First you need to decide which calculation method you’re going to use. If you’re taking the standard deduction, then your recordkeeping doesn’t have to be as meticulous because it’s a preset deduction. Though we’d caution against being too lax with reporting because an audit could still occur with the standard deduction.
At the start of the year, take odometer readings for all of your vehicles. You will need the total miles driven on your Form 2106. You should also maintain a vehicle mileage log with all of the aforementioned information. You can do this with paper or Excel sheets, but the most efficient and accurate way to do this is to use a telematics device.
In addition to details on trips and mileage, you should also store any receipts that you incur throughout your trip. You can also keep receipts for maintenance and equipment. It can be difficult to ensure you always get every receipt from your drivers and staff. However, there are solutions to this issue. A comprehensive fleet management software solution will include features such as fuel card integration. This would eliminate the need to keep all fuel receipts from each trip and vehicle since you’d be able to see these records on demand. This software stores these details in a centralized database for easy analysis and recall—vital during inspections. You should also sign up for automatic notifications and receipts wherever possible to further simplify your recordkeeping. If this isn’t possible, and you receive paper receipts, consider scanning them to a dedicated file on a central server or cloud storage.
You must retain your documents for at least three years in the case of an audit. It doesn’t matter how you store this data. However, if you have a large fleet and have difficulty staying organized and up to date, then telematics may be your best option. Telematics systems document mileage automatically and use cloud-based technology that can be accessed from anywhere. It can also log receipts, fuel stop locations and costs, maintenance receipts and costs, and so much more.
Fleet management software helps you stay up to date with all of your fleet’s movements. This smart software can store data for years to be used for analytics, predictive maintenance, and cost management. But fleet management software can do so much more than this. It also provides route optimization and planning, maintenance scheduling and alerts, driver behavior monitoring, engine diagnostics monitoring, and idling and utilization reporting.
Learn more about what fleet management software can do for your fleet, at Azuga.
A multi-drop route planner is a process that plans a route for a driver to make more than two deliveries in multiple locations. It uses vehicle routing software to collect and analyze thousands of data points and determine the best delivery route. This route planning software can plan, re-route, and reschedule without causing any danger to the driver, environment, or business. It considers many factors, such as the number of distribution centers, warehouses, or residential areas a driver has to visit, resource availability, and driver safety.
The route optimization software tracks the vehicle while factoring in when deliveries need to arrive. Of course, a human being should ensure that everything has been planned out properly, but the process should be automatic. Both this person and the system should look at distances, travel time, and fuel consumption.
Once a route is set, the route optimization software compiles data to choose the best vehicle and driver depending on the delivery. It uses data based on the route and the client’s needs. At this point, it also considers the driver’s hours and weather conditions to determine how much time is needed. These systems need to work in real-time to ensure that managers and clients can connect with up-to-date information.
There are various benefits to multi-drop route planning. It maximizes productivity, keeps fuel costs low, promotes driver safety, and helps businesses stay compliant with federal driver hour regulations. Your business will save money by using its drivers effectively and not using as much fuel.
If you’re looking for this software, you don’t need to search any further! Azuga’s route optimization software allows for multiple stops. It provides the best routes based on historical data, traffic conditions, weather conditions, and machine learning that helps it create the best routes for you in real-time. See what you can do with route planning software by trying out a demo today!
If you manage a fleet, you probably already understand the delicate dance that is fleet dispatching. If not, you may not realize just how crucial this process is to the success of any fleet-based business.
Simply put, fleet dispatching is the process by which commercial fleet drivers are sent out into the field to make deliveries, service customers, and handle other business-related tasks. But it involves so much more than simply telling drivers, “you go there.” Good fleet dispatching may also involve considerations for traffic conditions, road hazards, driver skill sets, customer preferences, and onboard equipment. When done correctly, it’s a skillful juggling act that helps a business reach its daily goals. When poorly handled, it can be a disaster for all concerned.
A fleet dispatcher is a person in charge of scheduling and arranging dispatch for a commercial fleet. Small fleets may have a single dispatcher to manage all calls, while larger enterprise fleets may employ an entire team.
A fleet dispatcher must clearly understand schedules and routes, job proficiencies, fuel management, fleet maintenance, and regulations related to hours of service and other fleet compliance issues. A good fleet dispatcher knows the drivers in the fleet well and can anticipate their scheduling needs and which jobs they are most suited to handle. Fleet dispatchers must be masters of communication and have elite organizational skills.
Fleet dispatching is as much an art as a science, and it can be overwhelming at times. The best way to support the fleet dispatchers on your team is to give them tools and technology that make the job easier. Fortunately, Azuga offers the answers to all of your fleet dispatching conundrums.
Our GPS Fleet Tracking software can keep track of all the vehicles in your fleet along with large equipment and other assets. Dispatchers can use this information to see which vehicles are nearby when a job pops up. What’s more, we offer top-notch route optimization tools to help guide drivers around road construction, accidents, and other hazards that might prevent them from getting to their destination on time. We can even help you schedule routine maintenance, promote road safety, and automatically deliver dispatch notifications to drivers in the field.
Learn about all the ways Azuga Fleet can help your commercial fleet stay productive and efficient while simplifying maintenance schedules and creating a culture of safety on the road. Schedule an Azuga demo today!
Last mile delivery is the step in delivery when something moves from a transportation hub to its final destination, such as a residence or a retail store. This step must be as quick and efficient as possible to ensure that customers are satisfied, and products move as much as possible. What is last mile delivery, and how can businesses perfect it?
There are five steps to last mile delivery to go through to ensure it is accurate and efficient.
Big-name companies like Amazon and Walmart are replacing last mile delivery with middle mile delivery. With middle mile delivery, the company owns the fulfillment, so the delivery process goes from the port to the fulfillment center. The problem with last mile delivery is that it is expensive: it can account for 53% of a shipment’s total costs. Supply chain inefficiencies are increasing as need grows, and so costs are only going up. It’s vital to optimize last mile delivery if you want to use it for your business.
Technology is the answer to optimizing last mile delivery. Route planning software, for example, can minimize delivery costs and cut the time that it takes to deliver. Auto dispatching also helps to cut down on mistakes and time. Finally, gathering data and getting detailed reports can help identify problems in your operations and tell you how to improve upon your weaknesses. Fleet management software like Azuga offers all of these features and more to help optimize your last mile delivery options.
Last mile delivery is still the standard way smaller businesses do their deliveries, and Azuga makes it possible to keep last mile delivery, even while competing with big retailers. Find out more about Azuga by reading our blog or visiting our website.