Vehicle Mileage in QuickBooks

For Billing and Reimbursement

Entering vehicle mileage in QuickBooks allows you to enter the mileage driven by company owners and/or employees for the purpose of reimbursing employees for the use of their personal vehicles for business or billing particular customers for mileage driven. I have a client who reimburses employees at the current IRS mileage rates for trips made for her company in their own vehicles. I have memorized reports saved for each employee and have a separate vehicle in the vehicle list for each employee. I can run a report for a particular time period and know quickly how much to reimburse them.

To access the mileage sheets, choose ‘Enter Vehicle Mileage’ from the Company menu at the top of QuickBooks.

Adding Vehicles

You can set up vehicles by selecting ‘Vehicle List’ from the menu at the top of this window. You can also add them by choosing ‘< Add New >’ from the drop down menu next to ‘Vehicle’. This will open the ‘New Vehicle’ window where you can enter the name of the vehicle and also a description if you would like. For company vehicles, you could enter the number of the vehicle or the year, make and model. For employee vehicles, you could simply enter the name of the employee. It is not important what you name the vehicle as long as anyone making entries can identify it correctly. Once you have finished with this window, select ‘OK’.

There is a mileage “sheet” for each trip. You can navigate between mileage sheets using the ‘Previous’ and ‘Next’ buttons at the top of the window. After selecting a vehicle, you can enter the starting and ending date for the trip. For mileage, you have the option of entering the starting and ending odometer readings or simply entering the total miles at the bottom of the window.

If you would like to track the cost of the trip to apply to a particular job, just select that job from the Customer:Job drop down menu. If you are billing the mileage to that job, be sure to check the ‘Billable’ option as well. If you are billing customers for mileage, you don’t have to use the IRS rates. You can set your own rates that you would like to charge your customers and which income account to use by setting up either a ‘Service’ item or an ‘Other Charge’ item. The difference between these two types of items is that the ‘Other Charge’ item allows you to specify a percentage or specific amount to charge your customers, whereas the ‘Service’ item only allows you to specify a specific rate. So, if you are going to bill the mileage or track the cost of mileage per job, you will need to choose the item you have set up for it.

You can access the IRS mileage rates you have entered by selecting ‘Mileage Rates‘ from the top of the ‘Enter Vehicle Mileage’ window. This window can be a little confusing, because when you first open it the most recent year is highlighted, which seems to suggest that you should type the newest effective date there. If you do, it will delete the previous effective date from your history which you should keep for your records. What you should do instead is click below the last date on the list, which will most likely be the oldest date. Once you have entered the latest effective date and the new rate, choose ‘Close’. If you open this window again, you will see that the date you entered will now be at the top of the list and your history of rates has been kept.

If your company uses class tracking you can select the class you want to apply the mileage to. Enter any notes below this for help in identifying what the trip was for, especially if you need to give details of your mileage to your customer. Those notes will be auto-filled into the description field for that item on your customer invoices when you choose to ‘Add Time/Costs…’.

Mileage Reports

The ‘Mileage Reports’ option is available at the top of the ‘Enter Vehicle Mileage’ window. You can view mileage by vehicle or job in summary or detail format. I have noticed the notes do not appear on the initial vehicle and job detail reports. You can modify those reports to show the notes. I have found it helpful to create memorized reports from these reports to save a few steps in the future when reading them.

The Vehicle Mileage feature of QuickBooks is an example of how the software has many features that can streamline certain aspects of bookkeeping and accounting. A features such as this one is great because the information can flow through to customer invoices, making it easier to keep track of, especially for businesses with lots of billable or reimbursable mileage.