Controlling fuel costs – one of the highest operating expenses for many fleets – is a daunting task. It involves many factors and variables, and requires the juggling of consumption reports, piles of receipts and pages of invoices. Ineffective fuel management is costly, negatively impacting a fleet’s bottom line.
Basically, fuel management encompasses accurately collecting data on how a fleet uses fuel and then using this information to better to control consumption, reduce cost and eliminate theft and waste. There a number of methods and systems for accomplishing.
The most basic systems comprise manual data collection and spreadsheets. These systems rely on the consistency of drivers recording their daily odometer readings and fuel purchases, as well as the accuracy of the data entry person and the commitment of the manager to make sense of all the information and decide how to use it, says Jack Lee, president and CEO of 4Refuel Canada, a company specializing in total fuel management solutions.
Such manual and semi-manual systems are susceptible to lost receipts, illegible faxes, inaccurate records and data entry errors, he notes. They also don’t help the manager make any sense of the data. Fuel management systems, on the other hand, automate the collecting of fuel data and measure the many activities related to refueling, doing away with human error and helping the manager understand the data.
The introduction of fleet cards has streamlined every aspect of fleet management, says Paul J. Citarella, senior vice president of sales and marketing, FleetCards USA, a company offering a large array of fleet fuel cards. “With their advance controls and tracking, business owners now have a tight rein on the activities of their drivers – however large the fleet may be. Moreover, having eliminated the need to hand over cash to drivers for fuel expenses, there is little room for suspicion or fraudulent activity . . . and internal fuel theft can virtually be a thing of the past.”
“If a fleet is running on a cash basis, managers are dependent on their drivers to justify their fuel and maintenance expenses and have to accept whatever receipts they provided,” he explains. “Additional time is consumed by reconciling expenses and reimbursing drivers, and the likelihood for theft is at an all-time high. Fleet cards provide control and driver accountability that a cash account or gas card can’t provide.”
Furthermore, fleet cards will often have incentives that provide a discount or “kickback” on the cost of fuel once a certain volume is reached each month.
As soon as the driver hits the road, the fleet card tracks every expense that is incurred for the vehicle. Refueling, maintenance repairs, fuel economy and mileage all can be tracked online by management, Citarella says. Even particulars such as the cost of fuel, tax, quantity of fuel purchased, the merchant name and location is readily available in real time if required.
Such information provides numerous benefits for a company, as it allows managers to acquire greater control over their fuel expenditures and gain the insight to make changes towards better fuel efficiency.
The best defense against internal fuel theft is the controls that can be set on sophisticated fuel cards, maintains Citarella. Managers can put limits on how much a driver can fuel up in a day, where they can purchase fuel and even limit purchase to fuel only.
Moreover, as fleet cards’ tracking software keeps a record of expenses, drivers no longer have to be accountable for submitting receipts and can focus more on the job at hand.
Advanced features in some fleet cards can allow drivers to pay for maintenance at designated, approved locations, Citarella notes. Fleet managers can track to ensure their vehicles are receiving the maintenance and repairs to be operating at their maximum fuel efficiency.
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Minneapolis-based auto service company keeps drivers accountable while automating its fleet operations across seven stores.