Is the increasing cost of fuel prices giving your company accounts team a major headache?
There’s no denying offering employees company cars and fuel reclaims is a great perk. However, it is often a very expensive exercise for business owners. You might be thinking there’s no way to save yourself money on fuel costs, after all, you can’t control the cost of fuel, right? Well, no. You can’t control the cost of fuel, but you can save yourself a significant amount of money by using fuel cards. How? Let’s take a look.
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What is a Fuel Card?
A fuel card works like a credit card in many ways. 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 account which the business pays off every month, similar to a credit card.
It’s a great way to keep track of your business fuel purchases, and has plenty of added benefits. For example, every purchase is recorded and itemised on a single tax statement, so you don’t need to keep track of fuel receipts. Not to mention many fuel cards offer great discounts and savings, which makes them invaluable to your business if you’re trying to save money on costly fuel expenses.
The Business & Savings Benefits of Fuel Cards
Keeping tabs on your vehicle fleet’s activity is vital for any business as at the end of the day, you don’t want to be spending extra money you don’t have to. Fuel cards not only offer savings and discounts, but they also prevent the real problem of fuel fraud. If you have a big fleet, it’s hard to monitor and track fuel expenses if you’re just using the receipts method. Not to mention fuel cards can provide you with invaluable data like the time, location, mileage and fuel drawn, which keeps you in the loop and on top of your company vehicles and helps you avoid overspending.
By monitoring fuelling activity and looking at the monthly fuel reports, you can analyse the data and costs so you can budget fuelling costs more accurately. And, by integrating fuel cards with GPS and odometer readings can better understand route costs, and calculate whether your employees could be taking a different route, which can save you money in the long run.
Fuel cards can also give you insights into your fleet, like recognising if a vehicle is becoming less efficient and in need of a service. A fuel card with odometer readings saves your business money because it records kilometers with every transaction, making it easier to monitor maintenance costs and schedule regular vehicle maintenance. And, odometer readings in fuel card reports help you quickly identify any problems in your fleet and which vehicles might not be performing as fuel efficiently as possible.
The Other Cost-Saving Benefits of Fuel Cards
Discounts and Savings
Most fuel cards offer discounts and savings. The typical discounts are off the fuel price, the card fees, and non-fuel partners such as vehicle servicing, roadside assistance and more. Businesses with higher fuel requirements can often negotiate discounts off the pump price of around 1-2c off per litre. This is different to the attractive promotional period discounts that are usually offered which is only valid for a fixed time period (usually 3-6 months).
Reduced Fuel Fraud
Fuel fraud is a common issue, but fuel cards make it almost impossible to commit fuel fraud. You are easily able to see and track all fuel payments so any fraudulent activity can be quickly noticed and stopped.
Fuel cards make it easy to understand your overall fleet costs, and budget better for these costs. You can then make adjustments if necessary.
Better Cash Flow
Fuel cards mean less of a headache for your accounts team. With a fuel card, you can receive one monthly invoice that has the details of all your fleet fuel purchases across the month. That means saying goodbye to pesky paper receipts, and the potential issue of receipt errors.
While you could simply give your employees a company credit card to buy fuel, fuel cards offer flexibility when it comes to purchasing limits. You can set a daily limit of fuel refilling, and limit the type of items employees purchase with the fuel card. The benefit? Less likelihood of fraudulent activity and better management of your fleet costs.