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If you run a business that requires your employees to be out on the road and doing plenty of driving, you no doubt know the headache that comes with it. Sure, company cars and paying for fuel is a great perk for employees, but for employers (and the accounts team), it can be expensive both in money and time. Making sure employees keep fuel receipts (which is half the battle) and consolidating the information across all your drivers come tax time is time-consuming. Meanwhile, petrol prices are constantly fluctuating and if your employees are on the road a lot, you can’t exactly tell them to wait to fill up when it’s cheapest.
So, what’s the solution? Fuel cards. While you can’t control the cost of fuel, you can use a fuel card to earn some great discounts and rewards. Plus, come tax time, your accounts team will love you because most fuel cards make it easy to consolidate all fuel expenses in one simple report. In this article, we’ll be going over exactly what a fuel card is so you can determine if it’s the right move for your business.
What is a Fuel Card?
At its core, fuel cards make managing your business fuel simple. A fuel card works like a credit card in many ways. It makes it easy to pay for and keep track of your business fuel expenses. It means your employees can pay for fuel without cash and without needing to submit a fuel reclaim. The fuel card is attached to an account and when an employee fills up, the cost is charged to that account.
The amount owing will then be deducted from your linked bank account or credit card, usually monthly.
Every purchase is recorded and itemised on a single tax statement, so there’s no need to keep and tally-up fuel receipts. And, many fuel cards also offer discounts and savings, which is a great value add and very convenient.
Why a Fuel Card is The Better Way to Pay
Why are fuel cards the better way to pay for your business’s fuel expenses? While you as the business owner can pay for your fuel with a credit card, attempting to control your employee’s fuel spending is difficult. A major benefit of a fuel card is you can control things like the type of petrol used to fill up, while also having daily spending limits, or even limits per transaction. You can also control whether employees use the fuel card to buy convenience store items, or whether it’s limited to fuel only. Some business owners choose to use credit cards because of rewards schemes attached to it, but actually most fuel card providers let you pay for your account via a credit card, so you can still earn rewards points.
Cash is also an option for paying for fuel, but who carries cash anymore? Also, with cash there is no kind of statement to record the transaction, so you’ll need to make sure employees keep the receipts – which can be difficult, especially if you’re asking them to keep every receipt across the year come tax time.
Perhaps you pay for fuel via a direct debit card attached to a bank account so you can pay for fuel directly from that account and avoid needing credit altogether. While this may be a cheaper option, you’re missing out on potential savings and discounts that many fuel providers offer.
What People Look for in a Fuel Card
You’re probably considering a fuel card because you’ve realised reconsolidating and keeping track of receipts is a waste of time and resources, right? Not to mention fuel is expensive. When it comes to finding the right fuel card, you want to look for things like: where can it be used? What are the fees associated with it? How much of a discount can you receive? Each fuel card provider comes with their own advantages and disadvantages, which is why it’s important to shop around to find the right fuel card for your needs.
The Benefits of a Fuel Card
There are countless benefits that come with signing up with a fuel card provider. Here are just a few reasons a fuel card is a great business decision:
Greater Control of Fuel Expenses
Fuel cards give you greater control over your fuel expenses. You can manage cards, create reporting systems, download statements and check your transaction history at any time. Also, you can choose what drivers buy with their cards – from fuel only or fuel and in-store purchases (depending on the card provider). Some fuel card providers allow you to set alerts to inform you if a drive exceeds your pre-designated limits, providing you greater control and transparency.
Saves You Time
Business never stops, and every second of the day counts. Who wants to be dealing with paper receipts, lost dockets and constant scanning? It’s a timewaster. However, with a fuel card, you can streamline your business fuel administrations. With easy end of month reconciling, it’s all done for you meaning your accounts team has more time to do the important things. Meanwhile, a single tax invoice and statement itemises the GST payable for all your fuel purchases throughout the year, so come tax time, you’re ready to go.
Saves You Money & Provides Greater Cash Flow
Depending on the fuel card provider you choose and how much your business spends on fuel per month, you can earn great savings on fuel. Most fuel providers offer excellent promo periods with great discounts, with many also offering ongoing fuel discounts too. Some come with rewards and extras, giving you discounts at vehicle accessory brands, tyre shops, mechanics and so on. Meanwhile, many fuel cards also offer flexible payment terms, including paying your account by credit card. This gives you great control over your cash flow.
Worried about fuel fraud? Many fuel cards are protected with anti-fraud technology and individual PIN numbers, which makes them easy to track. You can also protect the cards with the vehicle registration number and driver name, and/or odometer reading for extra protection.
What to Look Out for When Shopping for a Fuel Card
When shopping around for a fuel card, there are a few things you need to look out for. For example, most fuel providers offer attractive upfront discounts that last for the first 6 months. Then, after the 6 months are up, monthly card fees go up, pump price discounts go down and you’re left scratching your head wondering what happened. It’s important to read all the T&Cs when doing your research, or better yet talk to each fuel card provider’s sales team and ask the hard questions. Transparency can be a big issue in the world of fuel cards, but just be sure to ask the right questions (like is this discount/offer/price forever or just for now? What does it change to after the promo period ends?)
Does Your Business Really Need a Fuel Card?
Do you desperately need a fuel card for your business’s fuel expenses? No. Of course your business can get by without one, but do you really want to keep wasting time and money? Fuel cards are an inexpensive and convenient way to track and control your fuel expenses, with some great rewards and discounts attached to many of them. And, with most fuel card providers you can sign up for free and with no lock in contracts. Give it a go and see just how much a fuel card can help your business.