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100 WAYS: #9 Monitor Personal Use of Company Cars
– April 5, 2010
If you currently provide employees with company cars consider an employee owned fleet instead. With employee ownership, there is no corporate investment of business capital that might be better used elsewhere. If your company prefers to offer company cars, you should weigh the options of leasing vs. buying those cars. By leasing, you may be able to put available capital to work in another phase of the business operation, instead of locking it up in automobiles.
Regardless of who owns the company cars, there are some good general rules for minimizing the costs of maintaining them, for example:
- Use the smallest car and engine available that will meet your business requirements to reduce gas usage.
- If you operate company-owned or leased cars, be sure that your personal use charge-back policy is consistent with IRS regulations.
- Tighten up your vehicle eligibility requirements. Be sure everyone who has a company car really needs one.
- Maintain good cost control records on your vehicles.
- Re-examine your replacement cycle and make sure its realistic for your fleet.
Walker Coburn
318.429.2109
wcoburn@hmvcpa.com
Walker is a Senior Auditor in our Shreveport office. He received his Bachelor of Administration in Accounting and a Masters of Accountancy from Millsaps College in Jackson, MS. Prior to returning to his hometown of Shreveport and joining Heard, McElroy & Vestal, Walker worked for KPMG in Jackson and Memphis, and more recently as a financial reporting advisor for FedEx Corporate.
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