Purchasing fuel is being hyped as the number one cost priority for fleets in 2017 with tighter fuel management on the agenda. In the last five years, the cost of fuel has risen by 50% and there are no expectations for prices to recover in near the future so fleet. Many entrepreneurs and the likes are increasingly looking to lower their cost by using fuel cards for small business.
With fleet businesses often functioning on tight budgets, fuel cards have become the cornerstone of effective fleet management. As a recommended answer to the rising prices, they offer fleets a variety of benefits including reduced administration costs and lower fuel price advantages.
Despite their countless gains however, it’s important to be weary of possible fees surrounding fuel cards, additional charges and inconveniences that can quickly wipe any benefits away. On the surface, all fuel cards can look and work the same but like most things not everything is created equal.
The best way to avoid any costly mistakes relating to fleet fuel cards is to ensure you shop around for the best card system. This can save your business a tonne of time and money in the long run. We check out some expert tips into what your fleet business should consider before making a final decision, the types of fuel cards available and how you can reap the positive rewards.
Types of Fuel Cards
There are three main varieties of fuel card systems. Depending on the size of your fleet business and how it will be used will determine which one is right for you.
- Credit card fuel cards: This is a one card system similar to using your credit card. The single fuel card can be used at multiple service stations, for example; Shell, BP and Caltex.
2. Fuel cards direct from oil companies: These are sourced directed from one of the major oil companies and can be used at any service station associated with that card, for example; a BP card can only be used at BP service stations.
3. Fleet managed fuel card systems: Offer multiple fuel cards direct from the oil companies, all fully managed and under one account. These products are often consolidated with other services including vehicle maintenance and roadside assistance to increase savings across your fleet.
- Discounted Fuel
With fuel one of the biggest costs for fleet businesses, managers will jump on the opportunity to save significantly on these expenses. With a fuel card, drivers can benefit from direct fuel discounts that vary depending on the fuel card system you choose and your fuel usage.
- Consolidated Invoicing and Efficient Reporting
To help manage your fleet more efficiently, fuel cards also offer indirect savings through invoicing and reporting. One of the major benefits of fuel cards is the ability to generate reports for tracking and accountability of your fleet. Cost expenditure and exception reporting can be done online to save fleet managers time, money and paperwork.
All fuel transactions for each vehicle are consolidated into one easy-to-manage monthly invoice. Having one itemised invoice increases the transparency across your fleet, reduces admin costs and makes budgeting manageable.
- Additional Services
Additional services can be added to your fleet fuel card to consolidate all fleet services and ultimately save you more. These extra services can include accident management, insurance and vehicle servicing.
Choosing the Right Fuel Card Solution
- Fees and Charges
It’s important to pay close attention to the fees the fuel card supplier is going to charge you each month for managing your account. These can vary greatly from company to company. Some fuel card suppliers will charge multiple fees on top, including joining fees, cancellation or lost card fees, paper statement fees, reconciliation fees and card delivery fees.
Making it work for you
Always read the fine print and be sure to ask what additional charges will occur on your fuel card system. To save money on fees, look for fuel cards that have a flat and transparent fee structure.
Similar to credit cards, some fuel cards have higher transaction fees than others so make sure to find out if yours is subjected. The surcharge amount can vary from one service station to another and aren’t always made clear at the point of purchase. Whilst the charge may initially seem small, they are quick to add up over multiple transactions – especially if you’re not aware of when they are occurring.
Making it work for you
Before signing up to your chosen fuel card system, look into the surcharges that your card can be subjected too and compare these with other systems before deciding which one is right for your business.
- Card Acceptance
Again, like with credit cards not all fuel cards will be accepted at every fuel station. Some fuel cards can only be used at selected stations, limiting where you drivers can fill up. For drivers that work outside the metropolitan area, this can be problematic and costly where access to the particular service stations is limited.
Making it work for you
Review and check the list of accepting locations before you make your decision to determine if they are logistically a good fit for your operation. The best advice overall, is to review at least three different fuel card suppliers to see what they have on offer and how this benefits your fleet business. In summary, look for:
- Best acceptance for your operation, retail or over-the-road (truckstops).
- Research, research research! Just because the fuel card supplier is the biggest, it doesn’t mean they are the best option for your fleet needs.
- Review additional charges and transaction fees.
- What controls do they have on the card to control theft?
- What kind of discount fuel network do they offer?
When a fleet business chooses the right fuel card product the benefits are endless, providing your fleet with significant cost savings, convenience, control and flexibility. It’s proven to be one of the simplest and most effective ways to cut admin costs and hassle, whilst increasing transparency across your fleet.
As with any business investment though, research is vital and it’s important as a fleet manager, you’re on the lookout for hidden costs to ensure the benefits outweigh any charges.
Once you have selected your fuel card system, reap more of the rewards by streamlining the operation of your fleet with any additional services. Linking more services to your fuel card and selecting a system that works best for you is the foundation of successful fleet management – how will you manage your fleet?