For company-owned vehicles, the Tax Administration must be provided with driving logs upon request, which can be done manually or collected automatically using an electronic driving log service. This obligation usually justifies investing in an electronic driving log service. When making a purchase, it is worth mapping out the service's concrete additional benefits and potential disadvantages, which we aim to cover in detail in this article.
A driving logbook is an important aid in tax audits
A company can only receive a tax deduction if a driving log has been kept of the vehicle's use. The driving log should normally record the following information for each journey on a daily basis:
The driving logbook informs the tax authorities of the proportion of business-related and private trips. The company is obliged to prove that there have been no private trips if the car has been purchased only for use that qualifies for a deduction. Otherwise, the deduction will be interpreted as tax evasion or tax avoidance. Tax evasion can lead to criminal penalties and any deductions already made must be returned.
The tax authorities' travel information requirements for the content of the driving logbook vary by industry. Exceptions are listed in the tax authorities' by the side.
Benefits of an electronic driving logbook
Cost tracking: An electronic driving logbook service allows you to track and report vehicle-related costs, such as fuel consumption and maintenance. This helps companies gain a better understanding of the cost structure of their vehicles and make better decisions to optimize their business.
Efficiency and productivity: An electronic driving log automates the recording of driving trips, saving drivers time and effort. It also allows for easy sharing and storage of data, making it easier to manage and report on work. This improves efficiency and productivity within the organization.
Location, driving routes and traffic safety: Vehicle tracking and electronic driving logs help track the real-time location, speed, and route of a vehicle fleet. This promotes driving safety, route planning, and can help identify risk factors or guide drivers to safer and more economical driving.
Environmental friendliness: An electronic driving logbook makes it easy to report vehicle fleet emissions and environmental impacts. This helps organizations assess the carbon footprint of their business and develop more sustainable mobility solutions, such as a more environmentally friendly vehicle fleet.
An electronic driving logbook provides accurate and easy-to-use documentation, assists with tax reporting, improves efficiency and productivity, and supports safety and environmental friendliness.
– Navicom Team –
What is the most common concern when implementing an electronic driving logbook?
The most common concern when implementing an electronic logbook is usually related to data protection and privacy. Listed below are some key concerns that organizations may consider when considering the appropriate implementation between a hand-held and electronic logbook.
Personal data protection: An electronic driving logbook records information about vehicle usage and drivers. It is important to ensure that the processing of personal data is carried out in accordance with data protection legislation and that appropriate safeguards are in place to ensure the confidentiality and security of the data.
Driver privacy: Driving logs can contain detailed information about a driver’s movements and driving habits. It is important to consider how this information is used and stored. Particular attention must be paid to the privacy of drivers and to ensure that the data is processed only for necessary purposes.
User reliability: It is important to ensure that users keep their driving logbook up to date and that data is recorded reliably. The ease of use and user-friendliness of the operating system can affect how enthusiastically users commit to using the driving logbook.
Integration and compatibility: Implementing an electronic logbook may require system integration and compatibility with other business systems. It is important to ensure that the logbook can be seamlessly integrated with other required systems, such as accounting, payroll or travel expense systems.
Training and support: It is important to provide users with appropriate training and support during and after the implementation phase. In manual accounting, users need instructions and guidance on the correct use of the driving logbook, as well as the opportunity to get help with questions or problems. The tax authority requires the driver information of the vehicle in the driving logbook, so the employee or entrepreneur must be marked as the driver of the vehicle. In an electronic driving logbook, the driver information is marked in the driving logbook using a mobile application, a pad or permanently if the user is a regular driver. There are also different methods to choose from for distinguishing possible private drives, which must also be taken into account in the instructions.
Costs: Using an electronic logbook can involve an initial investment in hardware and software. In addition, services usually charge monthly or annual fees to ensure adequate software and customer support.
Things to consider in change management
Careful handling of concerns and resolution of related issues usually helps to ensure a smooth implementation and use of the electronic driving logbook in the organization. In our experience, implementation problems are very rare in practice, as the electronic driving logbook service reduces the workload of employees. However, sometimes employees may resist using the service and may threaten to resign. In practice, however, electronic driving logs are so widely used in Finland that in many industries, changing employers is unlikely to prevent the use of the electronic driving logbook.
We recommend informing and discussing the implementation of a vehicle tracking system with employees well in advance of the purchase and clearly justifying the benefits to employees so that they understand why the system is being implemented. This reduces conflicts between the employer and employee.
Summary
We recommend that you carefully evaluate the benefits and drawbacks of an electronic driving logbook in relation to your organization's needs and resources before implementing it. A company or group may have several software programs purchased for different needs, so it is worth considering system integrations or managing several different services in one system. It is worth reading our blog post one-app tactics.
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