The solution to this is simple.
They not only provide a more efficient solution for your business but save a significant amount of money too.
So how do they work?
The concept behind fuel cards is simple.
You fill out a short application, enter how many fuel cards you need and that’s it! If you meet the criteria, you’ll be accepted.
Your employees can now use the fuel cards whenever they need to purchase fuel, with the costs being consolidated on one simple invoice at the end of each month. Think of fuel cards as a zero-interest credit card limited to fuel only.
Sounds easy, right?
Besides saving time, what are some of the key benefits of using a fuel card? Let’s discuss that below.
It can save you a ton of money.
If I told you that I have a surefire way of saving your business money, would you want to know?
Of course you would! Every smart business owner works to try cut costs wherever possible to ensure the success of their business.
And if you haven’t already guessed, fuel cards can save money.
- Cheaper fuel costs – Fuel card companies partner with specific fuel stations, generally being the large chains with the cheapest fuel. Not only do fuel cards offer discounts on fuel, but also limit drivers to choosing the most economical fuel choices. Traditionally, drivers might get lazy or hungry and stop to fuel up at any fuel station on the way, despite the cost of the fuel. Fuel cards prevent this, ensuring drivers plan fuel-efficient routes. The few cents you’ll save per litre quickly adds up over the course of many vehicles.
- Identifying inefficient vehicles – Fuel cards are an invaluable tool to identify vehicles that have lower fuel efficiency than they should. This could be due to a variety of issues including mechanical faults or driver habits. Once you isolate and solve the problem, you can start to save money.
- More economical driver behaviour – Drivers have to log their odometer reading every time they make a stop to buy fuel. Without fuel cards it’s easy to forget or lose track of readings, resulting in data that is hardly accurate. Fuel cards prevent this by asking for the odometer reading at the point of sale, which gives a vehicle report at the end of each month. This pressure can encourage employees to drive more economically with fuel usage in mind.
Accurate monthly budgeting & forecasting.
Keeping track of thousands of fuel receipts and fluctuating fuel prices can make for a tricky situation for your accountant.
Fuel cards solve this in one simple fix. With a monthly report that outlines exactly what is spent on fuel costs, budgeting and forecasting each vehicle becomes significantly more accurate.
Drivers record odometer readings while buying fuel, so you can track drivers mileage and identify problematic vehicles. Monthly fuel card reports can also help identify seasonal trends, which can be an invaluable tool for planning ahead and predicting accurate company cash flow.
Fuel cards can help reduce admin and staff fees.
Without fuel cards, your business setup might look something like this:
When fueling company vehicles, there are two options:
- Give company drivers cash upfront to pay for fuel. – Carrying around large amounts of cash can be incredibly dangerous, which can easily be lost or stolen. This not only requires an extensive amount of work by your accountant to authorise dispensing of money but also puts an enormous amount of strain on your company cash flow. The more money you take out of your company cash flow, the less money you have available for other areas of running the business.
- Drivers pay for fuel out of their own pocket and are reimbursed later. – This can be tedious and frustrating for your drivers, and risky for yourself. This method comes with drawbacks, leaving a loophole for drivers to pay for non-authorised purchases alongside fuel without your knowledge. These could be car washes or shop items that are purchased with allocated fuel money.
Both of these options are inefficient and require extensive work by both your admin staff and accountants to process and store receipts.
This is an awful WASTE of time and money.
Thankfully, fuel cards offer an easy fix.
Rather than processing thousands of individual receipts, your account receives one organised invoice. A fuel card simplifies the process of buying fuel, reduces money paid to your admin staff and is ultimately a safer solution for you and your drivers.
Giving back to your drivers.
One of the many perks of having company fuel cards are the reward systems that come along with it. Many supermarkets offer loyalty programs and reward points every time fuel purchases are made using the card. These points can be used for grocery discounts and are a great way of giving back to your employees without additional financial outlay.
Small gestures like this can make a huge impact on your employees, resulting in increased work ethic, company loyalty and a reduced employee turnover.
How to find the best fuel card for your business?
When choosing the best fuel card for your business, it’s essential to consider any fees and costs that could render them more of a burden than a positive. By using our Fuel Card Comparison online calculator, you can compare the costs, benefits & terms of hundreds of fuel cards in seconds.
If you’re looking to save money and reduce your fuel costs, check out our blog post on reducing fuel usage.