Today’s fleet card market is not only growing, it’s becoming more sophisticated. More services than ever before now come connected to the fuel card so fleet managers can track spending and save money, while M2M connectivity and new technology are bringing fleet businesses into the 21st century.
Industry analysts have a conflicting view of today’s fuel card offerings. While the market is highly fragmented, it is highly lucrative; recent research says the industry will see a market valuation of $35 billion in the next four years, $20 billion higher than where it stands today.
The boost of this sector depends largely on meeting the demands of today’s fleet managers, and card issuers are in a race to offer the latest technologies and services. Luckily, industry experts collectively appear to agree that fleet cards are rising to this challenge.
U.K.-based Fuel Card Services published its newest Fleet Matters edition, a publication outlining the best practices in fleet spending, procurement and management. Its latest issue covers exactly which areas of their businesses that fleet managers must take a look at, and then examine how they can cut costs and wasted resources. Finding the right fuel card, the company says, is imperative to successfully managing fleet operations. And with today’s array of fuel card providers all working to meet market demand, there is no excuse why a fleet manager should allow wasted money.
Keys For Success
Fuel Card Services’ publication first advises fleet managers to take a look at their suppliers for fuel, IT, and other services. “When assessing potential suppliers, take note of the acquisition process,” the report concludes. “As a general rule, the faster and simpler that a vendor makes it for you to become a customer, the better the eventual customer service is likely to be.”
Obtaining the right suppliers – especially when it comes to a fuel card – means finding services that meet today’s demand for data, a space that has become crucial for fuel procurement. The manual collection and analysis of data related to total mileages, fuel quantities and cost, refueling locations – often required if a fleet manager depends on cash for fuel procurement – takes time and valuable resources. But today’s fuel card offerings are beginning to offer this data collection and analysis automatically, compatible with in-house software.
Having streamlined software, the report said, is equally as important, as it reduces reporting time, assures regulatory compliance, and more adequately tracks mileage and fuel costs.
“The fleet manager can see exactly the fleet refueling information needed within moments, with confidence in its accuracy. There is no need to task administrative with data entry or report compilation. Producing any necessary report takes just a minute or two, rather than hours.”
Tracking fuel procurement and consumption is already a complex task for fuel managers. Fuel Card Services noted that a key job of the fleet manager is to monitor global gas prices. “A single timing error in spot-buying a month’s fuel, in advance, could wipe out an entire year of potential savings,” the report found. That pressure is coupled with recent findings that fleet managers should not trust the mile-per-gallon figures provided by vehicle manufacturers. Fuel Card Services released a separate report on the issue in May, finding that fleet managers should test these MPG figures out themselves.
“While fleet managers wait for consumption figures that can be trusted, they should re-evaluate their fuel procurement,” said Fuel Card Services group marketing manager Steve Clarke.
Considering all of these challenges, paying for fuel with cash – either through reimbursement or cash advancements to drivers – appear even more outlandish and outdated. A cash-based fuel procurement system includes the threat of theft, fund misuse and paperwork. Plus, all payments to a driver must be recorded, filed and audited. “Process timings can present problems as late reimbursement to drivers causes morale issues, at best, while cash advances for future purchases impact cashflow,” the report said.
Corporate cards can wipe out many of these risks and burdens, but fleet managers must have a streamlined reporting and invoicing process in place to prevent card abuse. The expense reporting and reimbursement with cards can be similarly challenging as with cash.
Fuel Card Services tells fleet managers to audit fuel procurement, analyze how much paper it generates through invoices and reports, calculate how many employees it takes to process this paperwork, and discover how many hours it takes for this all to take place.
Fleet managers are already at an advantage when it comes to using more high-technology services to ensure their spending habits are on track. Experts note that the fleet industry’s existing infrastructure of M2M connections makes it easier for the industry to implement tools like mileage tracking.
These cost savings are nothing to scoff at, either. Research by FleetBeat published last year found that fleet managers could save $2.2 billion every year by using telematics, the IT data stemming from many technologies already seen in fleet vehicles like GPS and integrated mobile communication services. Those cost savings amount to 573 million gallons of fuel saved by fleets.
With all of these resources at hand, fleet managers today have an opportunity to greatly enhance their spending efficiency and tracking. Using the wrong fuel card, Fuel Card Services warned, means added cost on top of the cost of refueling. The right fuel card can automate these expense and reimbursement reports, and easily provide crucial data for every transaction for every vehicle. E-invoicing and automatic payment services provided from a fuel card company are crucial to saving time and money.