With the cost of living constantly going up, who wants to spend extra money on rising fuel costs? I certainly don’t. And I imagine most business owners would agree, especially those who own fleets of vehicles. If you think about it, when you add up how much is spent on fuel each month, the savings from discounted fuel could be significant. A popular solution amongst fleet owners for reducing monthly fuel expenses is fuel cards.
How exactly do fuel cards work?
Fuel cards work by enabling drivers to make fuel payments without using cash and are widely used by business owners for their business vehicles. The business owner will then be billed one monthly invoice for all transactions.
How can they help my business save money?
Knowledge is power
Knowing how much fuel your vehicles consume monthly and being across every transaction can really improve efficiency and allow for better planning.
Monitoring your vehicle activity is an important part of your business as it will in turn impact your wallet, especially if you have a sizeable fleet. It's not easy to keep tabs on every single vehicle, but this is where fuel cards are also extremely handy. Your monthly reporting should include details including the time, location, mileage and fuel drawn, thus allowing you to keep a close eye on your fleet. Additionally, because fuel cards require that drivers record odometer readings, you are always aware of mileage covered and the cost for that mileage which allows you to budget more accurately for your business. For example, knowing how much a particular route costs will let you calculate the necessary mileage allowance or look for a cheaper alternative route.
Lets compare the the advantages and disadvantages of fuel cards...
1. Discounted fuel
This comes in handy when you are battling high petrol prices and is a very good option to consider if you own a fleet which packs on the miles.
2. Administrative ease
Through fuel cards, you are able to receive one monthly invoice which details all fuel purchases; no need for your drivers to bring you bundles of receipts.
3. Less fraud
Business owners are able to see and track all fuel payments so any fraudulent spending will be be snapped up quickly through efficient reporting.
4. Cost Transparency
You know exactly how much your vehicles are costing you.
5. Improved Efficiency
When you take all the above factors into account, they all add up to one big positive – greater control and efficiency in your business.
1. Restricted network of available petrol stations
Depending on which fuel card company you choose, the number of fuel stations you can use may be limited. For example, if you get a BP fuel card, you will only be able to top up at BP gas stations. However, if you use a fleet management company for your fuel cards they can usually provide you with cards for several fuel providers.
Some fuel card companies will charge annual or monthly card provisions for each card you sign up which may seem like an unesscessary cost. However, this must be weighed up against indirect costs such as labour for the manual processing of fuel receipts every month or the administration involved in trying to reimburse fuel costs to drivers regularly. You will probably find the cost of not having fuel cards greater.
By having more knowledge about the activity of your fleet and less time spent on adminitration tasks, you will find you are in greater control of your organisation as a whole. If you are looking at fuel cards for your business don't forget that by choosing a fleet management company there are many other costs that can be streamlined and added to your one monthly invoice. There are some very strong SME products out there that offer fuel, vehicle maintenance and roadside all in one. So if you are looking at fuel cards as a way to reduce costs and admin for your business, be sure to explore all avenues out there and get the best possible value for your business.
It's essential to perform a thorough fuel card comparison before settling on a particular brand
It doesn’t matter what size your company is, fuel cards for small business right up to a large enterprise give fleet managers and financial controllers more knowledge about the activity of your fleet and can spend less time on administration tasks, you will find you are in greater control of your organisation as a whole. If you are looking at fuel cards for your business don't forget that by choosing a fleet management company there are many other costs that can be streamlined and added to your one monthly invoice.
At Fleetcare, we specialise in fuel cards with more than 4,000 fuel suppliers Australia-wide including Caltex, BP and Shell card. Visit our Fleetpro page if you would like to know more about our SME package.
Have you used fuel cards for your business? What was/is your experience? Please share your thoughts and comments below!