An employee’s paycheck is sacred territory. It is up to you to ensure that their earnings are competitive within your industry. Their wages must also be equitable across all of your locations as a business owner. The best way to manage these circumstances when you operate in multiple areas simultaneously is to design a comprehensive compensation structure.
You can focus these efforts on your internal cost-of-labor data when designing a program, but more information is necessary to provide fair and accurate compensation across all of your worksites. That’s where Runzheimer can provide some beneficial services.
When you have access to the tools from the Runzheimer Vehicle Reimbursement Program, then you can measure your purchasing power across every worksite. It also gives you the power to measure the qualitative elements that occur at isolated locations so that you can offer incentive plans to workers.
There are several pros and cons of the Runzheimer Vehicle Reimbursement Program to consider with its partnership with Motus.
List of the Pros of the Runzheimer Vehicle Reimbursement Program
1. This program offers fixed and variable rate reimbursements.
This program is the only methodology recommended by the Internal Revenue Service in the United States. Unlike the one-size-fits-all programs that provide a specific car allowance or a per-mile rate, the FAVR program through Motus reimburses workers for their individualized fixed and variable costs instead. That means their compensation is accurate to the needs of the reimbursement instead of these payments becoming a supplemental source of income for workers at different locations.
2. You can manage the fixed costs of vehicles with greater accuracy.
There are some specific fixed costs that you might need the Runzheimer Vehicle Reimbursement Program to manage for your company each month. These expenses include license and registration fees, property taxes, insurance premiums, and depreciation. Instead of trying to estimate how much an employee deserves for each mile to cover these costs, you can factor them into your compensation plan when workers provide you with this data. That means each person receives the exact reimbursement needed when using their vehicle for business purposes.
3. This option gives you the opportunity to manage variable costs as well.
Although variable costs are somewhat unpredictable by nature, the program that Motus operates through Runzheimer allows you to incorporate oil, maintenance, fuel, and gasoline expenses. These expenses are easy to calculate based on the number of miles that workers will drive on your behalf. You’ll need to factor in what the actual cost-per-gallon or liter of fuel is for each car, along with the quality of tires used on the vehicle, but this work can lead to an accurate FAVR that helps to save you money over the long run.
4. You can increase the productivity of your workers.
When you’re using the Runzheimer Vehicle Reimbursement Program, then it is much easier to administer a tax-free, accurate, and fair FAVR program using cloud-based technologies. Instead of forcing workers to calculate their own expenses or boost mileage numbers as a way to generate more cash, your company can offer the exact cost of driving to individuals. Your business achieves hard cost savings by taking this fully automated process, and your employees have more time in their day to do something productive.
When Techvalidate surveyed customers of Motus about the vehicle reimbursement program, 100% of them said that their productivity levels increased by 10% or more. 85% also said that they re-invested the cost savings from the Runzheimer Vehicle Reimbursement Program into their organization.
5. You have access to configurable parameters.
When you start using the Runzheimer Vehicle Reimbursement Program, then Motus gives you a business rules engine that calculates the reimbursement rates for each worker. It will factor in where an employee drives and how long they spend in their vehicle each day. You can configure the parameters on the map to meet all of your locations, with the infrastructure completely scalable to meet the needs of your company at any time. This process eliminates the problems with under-reimbursement or over-reimbursement that occur when you use a one-size-fits-all approach instead.
This advantage is so powerful that most businesses can reduce their budget line item for mileage reimbursement or car allowances by up to 20%. 91% of customers saw a return on their investment into this platform in just 6-12 months.
6. Your workers are always connected to you.
Mobile employees are out-of-reach during the average working day. They’re performing their duties while in their vehicles, completing jobs on their smartphones, tablets, or laptops. The CRM integration from the Runzheimer Vehicle Reimbursement Program allows you to track client visits in seamless ways. There are numerous tools that these connections help you to maximize as well, including route optimization, geographic data, field operations, and driving behaviors.
7. Employees have more flexibility with their choices.
When you use a reimbursement program for your mobile workers, then you’re giving employees extra flexibility in how they choose to perform their duties. Each person can choose to drive a vehicle that best meets the needs of their personal and professional responsibilities. If you have someone with a family, then they can choose a car with extra space in the back so that they can drive their children to different events after work. Someone who likes to travel on their off-days might prefer a vehicle with a higher level of fuel efficiency.
Businesses should not underestimate the value of offering these choices to employees. By receiving an effective compensation plan that reflects the exact needs of the vehicle, it is much easier for them to find the proper work-life balance. Then your budget can become healthier thanks to the Runzheimer Vehicle Reimbursement Program too.
8. The initial investment in the platform is quite minimal.
Motus claims that their platform can save their average client $3,000 per year for each mobile employee through their FAVR reimbursement program. When you compare the savings that you can achieve with this platform, then it is easy to see why so many companies are able to make their money back right away. You’ll need to contact the agency that administers the platform to receive an estimate on this investment, but you can receive a free assessment before making a final decision by answer a few questions about your current program.
9. This program eliminates many of your standard upfront costs.
When you decide to operate a vehicle reimbursement program, then you can eliminate the upfront costs that exist when trying to establish a fleet. There are fewer administrative costs to worry about when maintaining those vehicles as well. You can spend your time focusing on your core business processes instead of trying to manage or coordinate all of your corporate cars.
This advantage means there is less of a drain on your capital compared to the other methods of vehicle management that exist. The reimbursements begin when your employees start driving and stop when they quit. This advantage means you get to stop fronting the bills for personal use that can happen with a one-size-fits-all program.
List of the Cons of the Runzheimer Vehicle Reimbursement Program
1. You won’t know the price until you talk to Motus.
If you are curious about the Runzheimer Vehicle Reimbursement Program and want to do some price shopping, then you must get a formal estimate from Motus before you can proceed. That means you’ll need to go through all of the administrative work to get the ball rolling. Since there aren’t many reviews available online for this service, it can be difficult to determine if this is the right way to go.
The limited information that is available involves limitations on mileage computations since the work must be done monthly instead of daily. Additional feedback suggests that an option to edit the start and end times of each trip would allow for greater accuracy. It is simple and intuitive if you’re looking for a way to automate, so it could be worthwhile to request a demo or request an estimate.
2. There must be a way to capture and review business mileage.
If you want to provide an accurate system through Motus and the Runzheimer Vehicle Reimbursement Program, then you must have a way to capture and review the business mileage of each worker. You could track this data manually with an Excel spreadsheet, but this process tends to be tedious and time consuming. You’ll also lose visibility in the efficiency of their efforts and your overall costs.
Technology platforms like the Runzheimer Vehicle Reimbursement Program will automate your tracking efforts in the field, streamline submissions, and make payments much easier to complete. That means you have better visibility without making a significant time investment in your infrastructure to make things happen.
3. You don’t have as much control over the vehicles.
Since your business doesn’t lease or own the vehicles in question with a compensation plan like this, then there isn’t as much control over the equipment. You do have the option to implement a policy that defines the types of vehicles that are eligible for reimbursement to limit your costs, but you can’t restrict everything. This issue might not be a significant concern to some agencies, but it can be problematic if you want corporate imagery or brand messages on the cars as your people drive them.
This situation could provide some challenges that you might not be able to solve if you’re reimbursing workers for the time they spend on your behalf in their personal vehicles.
4. It can be challenging to determine a fair reimbursement amount.
Most companies use taxable car allowances as a way to reimburse mobile employees. Those who don’t use that option will typically pay a few cents per mile for their program. Both ways do not fully eliminate the under- or over-compensation problems that exist with one-size-fits-all programs. That’s why the Runzheimer Vehicle Reimbursement Program can offer several benefits, but it also means that you must use a system of complete customization. You must begin to track the activities of every worker to make this investment start to pay for itself.
Even though this platform pays for itself within a year for most companies, you must get some buy-in from your workers. If you have over-compensation issues, then taking expected funds away from employees will generate resistance. You might even see people walk off of the job or threatening legal action.
5. It may not be a suitable option for specialty vehicles.
There are some job positions that require the regular use of specialty vehicles to perform assigned duties. You will see this issue arise most often when managing cargo vans or large pickup trucks. The Runzheimer Vehicle Reimbursement Program can be a poor fit under these circumstances because there are only a few people who would ever purchase these vehicles for their personal use.
As a general rule of thumb, additional levels of vehicular specialties will usually present a greater argument that a company car should be presented to the mobile worker.
6. Workers must have access to the vehicle.
One of the intrinsic components of a vehicle reimbursement program is that workers must have access to a personal vehicle. The average household owns two cars in the United States, so it won’t be a concern with the average worker. There will be some employees that might be transitioning from a fleet-based program that could struggle to meet your initial needs. It is possible to bring on a new worker without them owning a car, so it might take them some time to research what they want or how to purchase or lease the car they want for their mobile work.
If you have numerous mobile workers who operate out of several different office centers, then the Runzheimer Vehicle Reimbursement Program can help you to manage your expenses with greater ease. This platform supports every industry, so your company can make sure that it is in compliance with IRS expectations while you work toward saving money.
Workers can face very different expenses. Imagine two workers who drive 500 miles monthly. One lives in Detroit, and the other is in Baltimore. If you were to pay them a $400 allowance, then the IRS would get over $160 of those funds, creating a high level of tax waste. That’s why individual mileage reimbursement programs are the best way to go.
When you evaluate the pros and cons of the Runzheimer Vehicle Reimbursement Program, then you will see that the cost of driving for business is entirely reimbursed for them. Your company benefits because there’s no W2 reporting in the United States. There are no local, state, or federal withholding issues to worry about either.
That’s why this opportunity is a win/win situation. You can discover more about this program by visiting Motus.com or Runzheimer.com today.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.