Jim Doherty, President
Travel expense reimbursement is one of those financial processes that is the number two expense in any company, but at the same time, businesses can’t administer it without help. For years, firms have either resorted to employing in-house taxable reimbursements or offering expensive cents-per-mile reimbursement to their employees who are always on the move. While these patchwork methods of reimbursement are simple, they are not flexible enough to provide accurate repayments. For instance, many companies provide a fixed taxable car allowance to their employees—regardless of where they live and how many miles they travel for business.
Some companies offer a vehicle provided program— leased or owned to help . However, company-provided vehicles often present 24/7 risk. More importantly, since many organizations already utilize a personal-use charge back method, company-provided vehicle program becomes unattractive for employees. Jim Doherty, president of AutoReimbursement.com (ARC), says, “We have seen a move from company-provided vehicles based on risk and employee desire to have a vehicle that works for them and their lifestyle.” So, reimbursement has become more attractive with modern approaches.
So, the pressing question here is, “how can a company ensure that they are not over-reimbursing or under-reimbursing an employee while also keeping track of their spending on vehicle-related expenses?” ARC has a program to correctly identify these costs down to 44,000 zip codes. As an additional value add, ARC consults on company total cost going forward along with expert driver meetings to show employee benefits of the plan. Jim Doherty comments, “we often see a win-win, the company and the employee see benefits from the plan.
Powered by the concept of IRS-approved fixed and variable rate (FAVR) reimbursement, Wisconsin-based ARC has an exact answer to this long-standing issue. ARC addresses risk management and employee satisfaction completely with a thorough expense savings analysis. The company’s IRS-approved FAVR program takes into account location-specific fuel costs, annual business mileage, and the maintenance cost incurred by each driver to provide businesses with a tailored reimbursement plan for every employee.
Doherty states, “Our FAVR plans are accurate, reliable, and comprehensive. We take into account 30 million data points that substantiate the zip code, business mileage, and assure that each employee receives fair reimbursement.” Best of all, the reimbursement is non-taxed, and requires no W2 reporting when in IRS compliance.
The company’s IRS-approved FAVR
program takes into account location specific vehicle reimbursement cost,
dramatically reduces company risk, and
best of all the plan is non-taxed
ARC helps companies create a FAVR plan that is individualized for each mobile worker’s profile for mileage and territory. ARC helps companies select a baseline vehicle that creates a benchmark for creating the plan. The fixed part of the FAVR program reflects a vehicle’s predetermined costs, such as depreciation, insurance, along with registration, sales tax, and license fees. The monthly fixed payment gives drivers comfort in receiving a fixed amount each month regardless of the miles reported for that month. The variable portion, on the other hand, includes expenditures such as the cost of gas, and scheduled maintenance, tires, which differs depending on the number of miles driven and the location of the vehicle. “With this kind of reimbursement program, companies have full visibility and control over the travel costs of their employees,” affirms Doherty. Another aspect that makes ARC a cut above the rest is its mobile-first approach for the FAVR program. The software can be accessed on the go by all employees, including administrators and executives. “The program also helps administrators accurately validate the exact mileage of each employee through streamlined reports,” affirms Doherty. Adjacently, ARC’s reimbursement program can be used to manage risks associated with insurance collection and validation of driver licenses.
Over the years, ARC’s reimbursement program has helped scores of clients across industries—including chemicals, pharmaceuticals, manufacturing, and food and beverages—create year over year savings. A case in point is a company that wanted to move its leased f leet program to ARC’s FAVR. “In less than two months, we helped the client create a customized FAVR plan for each employee,” says Doherty. Soon, the client was able to move from the provided vehicle program, uncover cost savings, reduce risk, and, maintain employee satisfaction. Doherty comments,“Today’s mobile employee enjoys choosing a vehicle that works for them for work, and personal needs like sports, or room for kids to go to the soccer field.”
To bolster the credibility of its platform, ARC is partners with MileIQ, a highly-rated mileage app from Microsoft. “Typically, a mobile employee makes several stops in a day. To manually log each of these halts is not only arduous but also extremely time-consuming,” informs Doherty. MileIQ, however, makes this process easy. Integrated with ARC’s FAVR program, MileIQ automatically and accurately tracks the distance a person travels and creates a comprehensive record of the mileage.
With powerful features like these, AutoReimbursement.com is indeed redefining the traditional landscape of ‘one-size-fits-all’ reimbursement programs. The company has already carved a niche for itself in the business expense management landscape, and they hope to further strengthen this position for the years to come.