Not Charging for Mileage? It Hurts Your Bottom Line in a Big Way

It's tempting not to charge your client or customer for your mileage and travel time, but it does more harm than good. Learning how to set your price can save your business from failure.

What to Charge for Mileage |

Product Recommendation: QuickBooks Mileage Tracker on the Self Employed appMileIQ

[We may earn a commission or referral fee when you click on the links appearing in this post. Read full disclosure].

Why you need to charge clients for travel

When your revenues don't cover all your business expenses, you're placing your livelihood at risk. Think of all the statistics on small businesses — not everyone makes it to their 25th anniversary, and it's for a reason.

Small business accounting software Quickbooks Self Employed App |
Up to 50% off QuickBooks Self-Employed App
READ MORE: What Price Should You Charge Your Customers?

What to charge for mileage

Everything has value, and you diminish it when you don't price your product or service correctly. It doesn't mean you have to nickel and dime your customers; add the travel service in your base price.

For example, your quoted price may include up to 35 miles of round-trip travel or 1 hour of travel time. Determine the added expense and raise the base price accordingly.

READ MORE: What is the mileage rate for 2019?

small business finances tax deductions |
Get up to 50% off QuickBooks

TIP: If your line of work requires frequent visits to customers' homes, then let them know they never have to pay extra for travel (but add the average cost to your base price).

The advantages of an all-inclusive quote

Imagine you are the customer. You don't like hidden fees or extra charges, which is why the flat price is so attractive. It's the hourly rates and per-minute or per-mile charges that are not popular. Make it easy for them to say yes to your service.
Everything has value, and you diminish it when you don't price your product or service correctly.
TIP: The process involves trial-and-error, so you need to reevaluate your expenses periodically to confirm the price still generates a healthy profit.

READ MORE: How to Claim Mileage from your Home Office

DISCLAIMER: Please consult with your accountant, attorney, and financial advisor before implementing any information displayed on this website. DIY research does not replace the advice of a licensed professional who has thoroughly reviewed your file.