Pitfalls of fleet expenses

When it comes to managing the cost of your company’s fleet of vehicles, what is your strategy?

Business owners today are at the intersection of expense management and day-to-day operations. Needing to control costs and enforce usage and operational efficiency plans, they are stuck between a rock and a hard place when it comes to balancing the theory and practice of cost cutting and budgeting.

There is help on the fleet management side. With a few key tools, which collectively make up what is known as a fleet management kit, businesses can be protected against wasted time and money, costly repairs that could have been prevented, and one of the biggest wildcards in operating a fleet of vehicles – the cost of fuel.

Easy ways to save
Today there are standard tools in the fleet management kit – dedicated fleet cards purchased through a provider, wireless vehicle tracking and diagnostics (also known as telematics) and fuel buying services – that give the modern business owner information around vehicle use in the constant effort to help them gain efficiencies and realize savings.

Dedicated fleet cards, which allow you to set limits and monitor employee purchases, capture usage information and provide insights into driver behavior. Paired with a telematics system that involves GPS-like tracking and vehicle diagnostics, business owners can monitor usage, track time on the road, optimize the efficiency of drivers’ routes, send them to best-price fueling locations and be alerted if there is a performance or maintenance issue.

Are your drivers idling in parking lots for extended periods of time, filling up at high-cost stations or driving around with the “Check Engine” light on? A telematics program can tell you.

Ultimately, fleet management programs that combine the power of a dedicated fleet card with the benefits of telematics and better fuel buying are still faced with fuel price volatility. The bottom-line impact of that volatility can be virtually eliminated with a financial product that sets the price of fuel, sets a range for the price of fuel or sets a ceiling for the price of fuel.

Setting limits, saving money
How far would you or your drivers go to pay less for gas? Consumers with more time than money would go pretty far to save a few cents on the cost per gallon. But they know the cost associated with driving around to fuel up at a low-cost station.

In most situations, the fully burdened cost-per-hour of that vehicle and driver precludes cruising around for a lower cost. It is times like these when telematics programs come in handy, allowing for more efficient routing and planning – putting drivers at the right stations at the right time.

Additionally, some fuel card providers have access to fuel price protection programs, which can help your business put an end to fuel price volatility. A provider will analyze your company’s current fueling costs, predict its future fuel needs and work together to create the right price protection strategy for your business and its budget.

With the assistance of a fleet card provider, these all-in-one fleet management tools are finding a place in the business owner’s arsenal to help them never miss a beat on budgeting for the future.

Kenneth W. Janosick is senior vice president of small business solutions at Wright Express Corp., a provider of business payment processing and information management solutions. For more information about the company, visit www.wrightexpress.com.