Step 2: Update your mileage reimbursement rate within SAP Concur. This is actually a task most organizations can accomplish themselves within the expense configuration, but if you have questions or need help, be sure to reach out to us. While adherence to the IRS guidance is optional, many organizations that choose not to reimburse at the full amount run the risk of alienating employees. This can result in employees padding their mileage claims to make up the difference, or in extreme situations, negatively impact the organization’s ability to attract and retain talent. Typically, these outcomes are much more expensive and problematic than simply adhering to the IRS guidance in the first place.

Step 3: Establish a mileage reimbursement strategy that boosts your employees’ experience while protecting your organization’s assets. As you are evaluating your mileage spend, explore your options for mitigating against waste and fraud, unfortunate biproducts that often accompany mileage reimbursement programs. For some organizations, simply establishing thresholds for when a personal vehicle is permissible rather than leveraging a corporate fleet vehicle or renting a car can save thousands, if not millions, in mileage reimbursements year over year. Fixed and variable rate (FAVR) programs are another great option for delivering fair and accurate mileage reimbursements for employees who drive frequently (5,000 miles or more per year). Finally, GPS mileage tracking^[2] can save your employees time in entering in their routes while also improving the accuracy of their claims and reducing padding. Mileage padding, whether intentional or not, costs your organization money on its own; when combined with this reimbursement rate increase, the costs begin to snowball.

This is not a strategy that can be determined overnight. However, with the right analysis and some thoughtful collaboration between your internal teams, you can harness the new IRS mileage reimbursement rate as a business improvement opportunity, rather than a costly change. As always, your SAP Concur account team and our vast ecosystem of partners are here to help.