This is a question many business owners and fleet managers ask and for good reason. If a fleet card can’t bring any value to your business, then what is the point of getting one?
The benefits a fuel card can bring to your business are based upon your business needs. Typically the more complex your fleet operation is, the more benefits a fuel card can provide for your business. So we’ve put together a list of questions to ask yourself to determine what fuel card benefits you will see if you started using a fuel card for your business.
Questions To Ask Yourself To Determine If A Fuel Card Can Benefit Your Business
How many drivers/employees will be using fleet cards?
The more drivers, the more difficult it becomes to track and control fuel purchases. With less than 5 employees you can probably easily manage fuel purchases by collecting fuel receipts and monitoring the company credit card statement. If you have 50 drivers that’s 10x the work.
Do you report to IFTA?
If your fleet reports to IFTA you already know how much time it takes to gather receipts and driver logs to report the miles and gallons in each state. Fuel cards make this job much easier as they collect odometer data and gallons purchased per state. Some fuel cards even have a custom IFTA report that organizes this data for you so you can easily copy and paste the data into the IFTA report.
How diligent are your employees when it comes to turning in fuel receipts and other fleet related purchases?
All fuel receipts should be turned into accounting with driver name, truck number, and manager initials signed on them so that accounting can reconcile those approved purchases with the credit card statement. If this task isn’t stressed by the managers to turn in fuel receipts on time to verify fuel purchases, it will be impossible to reconcile the company credit card statement.
Fuel cards automatically collect this fuel data that is provided on the receipt and organize it into reports that can be downloaded into Excel so that accounting can easily reconcile every fuel purchase.
This brings up the next point, if you can’t reconcile every fuel purchase, then how can you know that every purchase was for a company vehicle?
How susceptible is your current fuel purchasing method to employee fuel theft?
At the end of the month, if you can’t reconcile all fuel purchases, how do you know these fuel purchases are valid? How do you know if someone isn’t fueling their personal car or their boat on the weekend? How do you know if this is a fuel purchase in the first place? This problem can become costly without the proper controls.
Fleet cards are one way to get around this issue. You can set up time frame limits and days of week the card can be used. You can set purchase limits such as dollars per transaction, dollars per day, dollars per week, and dollars per month.
Then you can monitor every transaction online to see if there are any discrepancies in MPG, or out of character purchasing behavior for a driver/vehicle to help identify driver misuse/theft.
Do your drivers need to purchase maintenance items at truck stops?
If you have a large enough fleet, you probably have drums of oil and other additives at the yard that are purchased in bulk to cut cost on maintenance items. Allowing your drivers to purchase overpriced oil at a truck stop may encourage drivers not to be disciplined to get additives while they are at the yard, which costs your company money. But the other side of this is that buying the overpriced oil at the truck stop could save you $20,000-$40,000 on an engine rebuild if their engine was low on oil.
For smaller fleets it may be beneficial to purchase all maintenance items as needed at truck stops since there is no need to buy maintenance items in bulk. At least the fleet card provides the control to limit purchases to maintenance items and fuel.
How complex is your corporation?
Typically larger and more complex organizations with lots of accounting staff and compliance/risk departments scrutinize every purchase before it is paid. This requires a lot of labor from the people in charge of verifying all the fuel purchases before they are paid.
Once again fleet cards have the reporting capabilities to make this task as simple as downloading an Excel report and checking it off rather than collecting receipts and entering all the data into spreadsheets.
What payment terms can you operate with?
Fuel cards usually have shorter payment cycles than your typical vendors. Most fuel cards will offer weekly or semi-monthly billing with net 10 payments terms. You might be able to find monthly billing as the longest payment cycle. This is because fuel is sold at small margins and fuel cards have short terms with merchants (gas stations) and merchants have short terms with the racks (place where gas stations purchase fuel). Thus cash flow cost would be too high to make any profit if fuel cards offered 30,60,90 day terms.
Do you want to keep track of fuel data metrics?
Will fuel economy per vehicle, fuel cost per vehicle, and odometer reporting help you make decisions? Some fleets are locked into one operation that requires one type of truck which this data is great, but not helpful. If you have a mixed fleet with mixed uses you can evaluate which vehicles provide the best ROI. Fuel cards track this level 3 data to provide the fleet fueling metrics you need.
Summary List of Fuel Card Benefits
From the questions above, you may see a few ways a fuel card can benefit your business. In case we have missed anything here is a summary list of fuel card benefits.
Fuel card benefits
- Control fuel purchases with fuel card spend limits
- Limit drivers to purchase fuel and/or maintenance items only
- Monitor fuel purchases with online reporting and purchase alerts via email or text
- IFTA reporting to save IFTA reporting labor time
- Fuel expense reports save accounting labor time
- Consolidated fuel invoices for easy accounting reconciliation
- Collect level 3 fleet data to provide fleet fueling metrics to help make vehicle purchasing decisions and current vehicle maintenance decisions
