Keeping track of your mileage is very similar to keeping track of your time. It is good sense to make both types of entries in the same app. That is what I have done in the TIME feature upgrade. Here is an overview of how it works.
First let’s cover some of the concepts.
THE THREE COMPONENTS OF MILEAGE CALCULATIONS
The three components of mileage calculations are Miles, Rate, and Markup.
The purpose of the markup is to recover the cost of managing the mileage process - record keeping, financial transactions, invoicing, etc. These tasks are required only because you have a project. Each project will incur different mileage. And traditionally Owner-Architect Agreements make provisions for recovering the cost of mileage as a reimbursable expense.
SETTING MILEAGE RATES
The mileage Rate is what you will reimburse your staff per mile driven for business. The rate that the IRS will let you treat as an expense is set by them at least annually. Setting your rates lower only has potential morale issues (negative). Setting your rates higher than the IRS amount creates lots of extra work at tax time because some of the reimbursement will be treated as income.
Using the IRS rate is my recommendation. Here is where you can find it.
SETTING MARKUPS FOR MILEAGE CHARGES
If your fee agreement includes mileage as part of your fee, then set the markup to zero (0), which will show that nothing is due from the client.
If your fee agreement includes mileage as a reimbursable expense _without_ markup, then set the markup to one (1.0), which will show that the same amount as paid to the driver is due from the client.
If your fee agreement includes mileage as a reimbursable expense with markup, then set the markup to one plus some percentage, which will show that a larger amount than paid to the driver is due from the client. If you increase the rate by 15%, then the markup would be 1.15. Typical markups for mileage range from 1.1 to 1.5.
TACTICS FOR USING MILEAGE
Not recommended, but it is an option. Simply ignore use of the Mileage feature. You probably should have this policy decision documented for clarity.
REIMBURSE STAFF BUT DON’T CHARGE CLIENT
Use a rate for this Project, but set the markup to zero (0). This is not recommended unless you are being compensated for mileage through your fee.
REIMBURSE STAFF AND CHARGE CLIENT SAME AMOUNT
Use a rate for this Project, and set the markup to one (1.0). You are reimbursed for your out-of-pocket mileage expenses, but not your time for managing the process. Some clients might insist on this approach. It is the approach that you would use for in-house (General Office) mileage.
REIMBURSE STAFF AND CHARGE CLIENT A MARKUP ON THAT AMOUNT
Use a rate for this Project, and set the markup higher than one [1.0] to compensate you for the administrative time used for tracking mileage. Most clients will accept this approach.
THE MYCORBU TIME IMPLEMENTATION OF MILEAGE
If you have upgraded to TIME, then on the Timesheet page you will see a menu button at the top of the page that says “🚙 MILEAGE”.
Clicking this button will open a new page with a form for making a mileage entry and a table showing all your previous mileage entries. The table has this information:
So far this is what the individual user sees. The Admin needs a bit more information, and this is where things get a little complicated.
In order to be a useful tool, you need to be able to change the Mileage Rate annually. That sounds simple, but you don't want that change to change all your previous mileage entries. Of course not. And you need to vary the markup from project to project depending on your agreement. So each mileage entry needs to be tied to a named mileage rate that is tracked in a separate table just for your organization.
The Admin page will have a menu button, “🚙 MILEAGE ENTRIES”, that opens a table of all the mileage entries. That table is much more complicated and has this information.
The MyCorbu TIME implementation of ‘mileage’ collects all the data that you need for addressing reimbursement of the staff member who has driven on behalf of the project. You are also able to manage the invoicing and collection of mileage reimbursement with your client.
The Admin’s table allows for filtering by time period, staff member, project, and status of payment so that you can manage everything about mileage in one place.
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