Small Business Tips

How can a small business use a car tracker?

MileIQ Team

Small companies often rely on cars to run their businesses. However, few use a car tracker. Many business owners don’t know why they would use one when they already have an odometer to track mileage.

Read on to learn how you can use a car tracker—and which tool to choose.  

Why would a small business owner use a car tracker?

All cars come with odometers. There are many reasons a business owner might also use a car tracker. These include:

Tax purposes

You can use your odometer to track mileage for tax purposes. But you have to record the distance before you start the car. Then, you have to subtract the difference once you reach your destination. Car trackers monitor each drive. Later, you can mark which trips were business-related. Then, you can review and record the accurate mileage information. The IRS requires that you log trip mileage, dates, locations, and purpose. Car trackers can provide all of this information.

Security

Some cars come with security features. These allow owners to track their vehicle if they go missing. A car tracker provides similar capabilities. Many trackers, like GPS devices, turn on each time your engine starts. They track your assets if someone else moves it illegally. High security is critical if your business owns a fleet of company cars. A car tracker can help protect your assets.  

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Compliance

The IRS has a compliance guide for car use. You may have a car dedicated to business use. In that case, you can deduct all of its operating costs. Many business owners use a vehicle for both business and personal tasks. In that case, you can deduct car expenses by calculating mileage or actual expenses. You must provide records that support your claims no matter which method you choose. Car trackers make it far easier to back up your mileage and fuel use.

Accountability

If an employee uses their car for your business, you should have an accountable plan. (You may want to mention this plan in your employee benefits package.) An accountable plan lays out your business’s mileage reimbursement system. With this kind of program, you’ll need to track employee mileage. A car tracker is a great solution. Employees don’t need to worry about manually tracking their mileage. Plus, you can be sure that recorded information is accurate.

Different car tracker tools for businesses

If you decide that a car tracker is right for your business, you will find many options on the market. These include:

GPS devices

Some GPS devices are made for tracking mileage. As you might guess, these work well for tracking business mileage. With most of these devices, business owners plug in the GPS device when they want to record a trip. Then, they can unplug it when driving for personal reasons. GPS devices made for tracking mileage often have reporting dashboards through web or phone apps.

Car tracker apps

A GPS device can get the job done. Car tracker phone apps take mileage tracking to the next level. These advanced apps work in the background of your smartphone. Once opened, they record each individual drive. Then, you can decide whether the drive was a business or a personal trip. Alternatively, car tracker apps can classify drives based on your specified work hours. They also display car use statistics through user-friendly dashboards.

Other considerations for choosing a car tracker

Some business owners don’t use cars for work. If that is the case with your business, do not feel pressured to buy a car tracker. However, you might use your vehicle for business once or twice each week. In that case, you might benefit from one.  

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