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How to streamline fuel cost and expense management to achieve scalable growth

How to streamline fuel cost and expense management to achieve scalable growth

Around 100,000 SMEs?were established in 2016 and 2017. With the competition fierce, many bosses are setting themselves ambitious short-term growth plans. For those that operate a fleet to carry out fundamental business functions, they must be agile enough to quickly upscale vehicle capacity.

But more vehicles and drivers will result in higher overall spend on fuel a commodity which recently reached its highest price since 2014. This is a problem considering that fuel is the largest contributor to overall fleet operating costs.

What’s more, SMEs rarely have a dedicated fleet operator to effectively manage the administration and expenses that come with increased fuel spend. In fact, according to research from FLEETCOR subsidiary?Allstar Business Solutions, over 98% of fleet operators with up to 50 vehicles undertake additional roles within the business, such as management or HR duties.

To help them get ahead, SMEs must have the technology, resources, payments and expense processes in place to deal with an influx of additional transactions. Should business owners fail to do this, they risk hindering their strategic growth plans through time and money lost to inefficient administration.

The three M’s of fuel management

Growing a fleet is a big step as there are vehicle, upkeep and extra staffing costs. Therefore, it’s important to start off on the right foot with money management and embracing best practices is recommended.

Stay on top of fuel spend by following the “three M’s” maintenance, monitoring and minimising, alongside streamlining the payments administration process.

Best practice for fleet?maintenance

To avoid losing funds to unnecessary repair work, fleet managers should operate and maintain vehicles to optimise fuel efficiency. Fleets that aren?t maintained appropriately will end up having cost implications. For example, engines that have to work harder as a result of worn tyres or dirty engines use more fuel.

While on the surface these costs may seem negligible, the reality is that implications can be substantial, particularly with maintenance costs on an upward trajectory.

Fuel cards can play a part in reducing service, maintenance and repair (SMR) costs. For example, the Allstar Plus VISA card, developed by Allstar Business Solutions, offers a rebate scheme at over 1,000 UK garages on all SMR work when using the card.

Monitor”fuel use to enable better control around total fuel spend

Technology is streamlining processes and driving efficiencies across most sectors. For fleet operators, the data provided by improved technology is driving these efficiencies, particularly when it comes to fuel spend.

To make the most of the information, operators must be able to collect comprehensive management information that is available to them and subsequently analyse the data this provides. By working out mileage, the frequency of fuel stops and reviewing maintenance logs, SMEs can pinpoint ineffective vehicles when it comes to fuel use.

Minimisingoverall fuel consumption

Keeping fuel consumption to a minimum is an easy way to avoid unnecessary fill-ups, but implementing this mentality across a business can be met with resistance from employees that are used to a certain driving style.

Train staff to drive in a fuel-efficient manner. Simple adjustments such as accelerating gently, maintaining a steady speed and coasting to decelerate can reduce fuel consumption by up to 25%. Other tactics include; avoiding idling, removing excess weight and planning the journey to avoid getting lost.

UPS drivers in the US, for example, are told to avoid making right-hand turns unless absolutely necessary. It saved the company millions of gallons of fuel, apparently.

Going beyond fuel to streamline payments

Keeping costs down and increasing efficiency isn’t just about saving on fuel or maintenance costs, but streamlining processes to ensure fleet operators are able to save time.

By following these simple steps, SMEs can bring greater efficiency to their overall fuel use, vehicles and payment processes. This can help to ensure that businesses are prepared ahead of a growth in their fleet and the additional costs that will occur.

Thore Vestergaard is SVP and MD of commercial cards at FLEETCOR.


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