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Gas Purchases

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Old 01-20-2011, 02:25 PM   #1
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Gas Purchases

Looking for advice.

We do commercial maintenance throughout the state (sometimes the tri-state area) and have a sub who drives a decent distance every day. We've given him a company credit card to pay for materials, tolls, but mainly gas. Lately we've been seeing a huge spike in the gas purchases. Though some is justified, we're seeking an alternative.

Firstly, this sub is using his OWN vehicle. We realize that's a plus as we don't need to provide a company van/truck, insurance, AND gas, and everything else that goes along with it.

We've discussed asking this sub to track his mileage and perhaps we could simply compensate him that way, but we don't think he'll remember to do that properly. We can't really just googlemap the mileage as sometimes he goes into the city and can drive around for a while looking for parking.

The issue we have is the occassional "unaccounted" for purchases. They're not horribly expensive things, but 10 or 15 dollars or so here and there and things like a tank fill-up on Christmas Eve (when he didn't work that day or for 3 days following).

We've recently gone through our books and realized it's about 900-1000 dollars a month. If this continues, our owner has thought about just giving him the company van to go out with, but that would also make us pay for his mileage back to the office to return it every day, when mainly he just leaves from his last job.

When it comes to the "unaccounted" purchases, personally I believe that's almost a non-issue. With any company, you can almost expect any employee to take a little here and there(I don't), and his extraciricular purchases aren't anything harsh. That being said, stealing from the company is stealing from the company. And now that he knows we're closely tracking his purchases, I suspect that'll be the last we see of that.

So, what do you think? Are we blowing this out of proportion and just leave him with the credit card? Should we look into the mileage idea more? Should we buy a designated gas card for him to use(that might even help us track our materials purchases better in office)? Or do you have any better ideas?

Thanks guys. This is my first post here. Please be gentle.
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Old 01-20-2011, 02:29 PM   #2
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Re: Gas Purchases

Have you just asked him about it?


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Old 01-20-2011, 02:42 PM   #3
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Re: Gas Purchases

What about a prepaid card or reloaded card.. Put X amount of dollars on there a week. Anything else he needs ask him to pay out of pocket provide receipts for reembursement
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Old 01-20-2011, 03:54 PM   #4
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Re: Gas Purchases


Last edited by user71584; 02-01-2011 at 06:48 AM.
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Old 01-20-2011, 04:29 PM   #5
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Re: Gas Purchases

Every time I pay for something with a card, I get a receipt. What's he doing with his?

As for a mileage log, I've kept one for the last 30 years, and claim the mileage on my taxes. This sub should be well acquainted with that procedure.
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Old 01-20-2011, 04:40 PM   #6
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Re: Gas Purchases

What about putting a lock on the times he can use it. You could set it so that he can't use it on say the weekends or after or before certain times of the day.
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Old 01-20-2011, 04:41 PM   #7
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Re: Gas Purchases

Sounds totally messed up. How can he be a sub if he has a company credit card? And now the owner wants to give this "sub" the company van? Ha ha ha. The company you work for needs to get this individual and this buisness relationship under control.

If the owner wants him as an employee with a van, well so be it. Hire him and put him on the books. If he needs to remain a true 1099 sub (something he surely is not right now!), then he gets himself to and from the jobsites. If he needs mileage, then he needs to remember to write it down in a verifiable log book.
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Old 01-20-2011, 05:46 PM   #8
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Re: Gas Purchases

You definitely need to get a system of checks and balances into your way of working with this sub. He's obviously not just showing up blindly to a job, you've got to be giving him a work order or some sort of direction as to where to go and what to do when he gets there. These work orders should be in writing and he should be turning in receipts with each of the work orders so that you're able to job cost and bill your clients accordingly. This will also allow you to see if he's skimming materials off for other purposes.

Mileage is relatively easy to figure out. What does he drive and what is the estimated MPG on it? If he's buying gas every other day, then he's filling other vehicles up on your dime or charging you for all the gas that goes through his truck, whether it's for your business or his.

Another way to tighten the purse strings is to provide him with a gas credit card that only buys gas. Fuel will be a bit more expensive this way, but you'll know how much he's using and how frequently he's filling up. Credit accounts with suppliers would remove the need for him to carry your credit card for material purchases. In addition, supplier receipts will have the work order number on them so that you know exactly what and where materials are going.
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Old 01-20-2011, 06:11 PM   #9
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Re: Gas Purchases

Another case of wanting your cake and to eat it too. A sub... an employee... uh... kinda.. no... maybe... well... hmm?

How is it one the one hand, not a big deal... $10 here... $15... there... and then it's $1000 a month??????

Don't want to pay him to drive back to the office... etc... etc...

Good luck, you have more problems then a company gas card. Is he a sub or is he an employee?

Why are you paying for his gas? Why isn't he just covering that in his invoice to you?
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Old 01-20-2011, 06:17 PM   #10
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Re: Gas Purchases

It seems to me like there is tax evasion going on here.

If it's strictly your business vehicle, no personal use at all, then all the costs associated with that vehicle are a legitimate business expense. That is not the case here, so you MUST use the other method. You may pay him mileage, for that he MUST keep a contemporaneous log. You can reimburse him at the current IRS rate or less, if it's more you must report the additional amount as 1099 income.

Since you have been just having him charge his vehicle expense to your card, you are required to 1099 the full amount of the charges to him. Your sub then must keep his own contemporaneous record of mileage in order to deduct his vehicle costs or, if there is no personal use of the vehicle, he could expense all the costs on his own.

You are mixing your stuff with his. Uncle sam is going to tell you that he is not a sub, he's an employee, and the money for gas, the way you are doing it, is taxable income to him.
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Old 01-20-2011, 06:18 PM   #11
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Re: Gas Purchases

I think you got a slickster employee.

The huge spikes in gas purchases works like this:
The guy calls all his buddies and family to meet at the gas station for cheap gas. What he's doing is selling gas at the gas station to his acquaintances for about half price.

He put $20 on pump 4 with the credit card and gets $10 cash from his peeps. Get enough people to meet you at the station and he may clear 100 bucks!

Be street smart!
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Old 01-20-2011, 06:22 PM   #12
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Re: Gas Purchases

Originally Posted by Darwin View Post
I think you got a slickster sub, and a dumbass for a boss
I fixed it for you, Darwin.
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Old 01-20-2011, 07:21 PM   #13
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Re: Gas Purchases

I reimurse my employee for an agreed upon amount for gas each month. I asked how much they thought would be fair and then offered more than that to avoid any hard fealings about wear and tear.

In your case I would set it up where you reimburse him weekly or monthly for fuel purchases in exchange for recipts. that way he will be there to explain the $1000 while you are proccessing the check. Wheh he knows he will be giveing you the total face to face I am sure there will be less abuse.

Cheers Jim
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Old 01-20-2011, 07:25 PM   #14
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Re: Gas Purchases

It sounds like the employer is pulling a fast one. Not paying for comp unemployment and having proper INS on the vehicle. I'm a sub I should see if my gc's want to pay my expenses on top of my invoices. That would be cool 3.19 a gallon
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Old 01-20-2011, 09:10 PM   #15
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Re: Gas Purchases

This post almost smacks of Pete55:
Some of this scenerio as laid out by the OP is rather far fetched; the sub, a company van, a cc, not being able to keep track of his mileage and not being able to use google map because the sub "has to drive around a bit looking for parking"?
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Old 01-20-2011, 09:20 PM   #16
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Re: Gas Purchases

Originally Posted by Tinstaafl View Post
Every time I pay for something with a card, I get a receipt.
Or with cash. That's the ONLY way to get reinbursed/bill it.
If the OP is issuing cards, he should have a fixed amount on it and transfer money from one account into it.
Fred's acct, Barney's account, etc.
Main working account transfers money to those accounts (cards).

if there's a problem with fuel, then the OP should just pay by mile and have their subs/employees submit weekly mileage reports.
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Old 01-20-2011, 09:23 PM   #17
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Re: Gas Purchases

Originally Posted by Anti-wingnut View Post
Is this guy a troll?
I've found on algore's internet is even weird/stupid/troll/etc. posts there can be value. Most read, few post.
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Old 01-21-2011, 12:32 AM   #18
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Re: Gas Purchases

It's simple, if you want to pay for his gas for whatever backwards reason (I was never paid gas as a sub, unless the job was over 50 miles away, then I either billed a trip charge, or gas receipts when I got paid) - make him track mileage. The guy is ripping you off. If he fails to track the mileage, he doesn't get paid for it - it's THAT SIMPLE!

If he doesn't log mileage - including records of where he was going - then he doesn't get jack, and it's his problem. If he doesn't like it, GOOD - cause he's ripping you off and you're better off finding someone else, or doing it yourself.
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Old 01-21-2011, 12:49 AM   #19
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Re: Gas Purchases

Pete - thank you for the questions you post in your threads. They truly help me better myself and my company.

When is Finley going to tell us that he has been pranking us this whole time?
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Old 01-21-2011, 02:26 AM   #20
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Re: Gas Purchases

maybe he's filling up someone else's car too?

i'd demand that he gets a receipt everytime he fills up, and tell him to write down the mileage on the receipt. and then check his odometer once in a while.


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