How Fuel Cards Reduce Costs

Most fleet managers have probably heard how fuel cards can help to reduce many of their expenses. Unfortunately, though, a lot of them just write this information off as "hype" and continue doing things the old fashioned way, such as having their drivers record their fueling expenses and mileage and then reimbursing them for it.

This method can lead to many excess costs, as well as the time and hassle of tracking down receipts. While there are some companies that do it well, it makes their work much harder than it needs to be, proving that fuel cards are truly the way to go for businesses hoping to save money.

In-Network Discounts

One of the first advantages comes for those fleet managers who choose branded fuel cards. These are fuel cards that, as the name implies, are linked to a particular brand or supplier. FleetCor, for example, has cards designed to be used with the Shell fuel line. As another example, those who purchase cards in Europe will have the value added tax, more commonly known as the VAT, fully rebated.

With these branded cards, discounts are received any time that the card is used with a station owned by the relevant provider. In the case of a huge and omnipresent provider such as Shell, fueling up at in-network stations is not difficult.

Furthermore, most cards do have an option through which cardholders can fuel up at stations owned by other, out-of-network providers, such as in the case of emergencies, so drivers are never left stranded or "out of luck" in an unexpected situation.

However, maximum discounts can be achieved through using an in-network provider consistently. Fortunately, there are all kinds of cards and networks available, both in the United States and Europe, including cards from FleetCor Technologies in cooperation with Shell, the FuelMan Network, the FuelCard Company, and FleetCardsUSA.

Reduced Accounting Costs

One benefit of fuel cards that tends to surprise most fleet managers is the fact that, because the cards provide so much information, they are often able to eliminate the need for accountants and to, instead, self-report tax information.

Most modern fuel cards offer detailed reports on each transaction, including all of the following:

• Driver ID associated with the transaction
• Odometer reading at the time of the transaction* The date of the transaction* The time of the transaction* The merchant name* The full purchase amount
Having all of this information so readily available and compiled into a convenient report makes it much easier to report tax information without the need for or expense of an accountant.
No Over-Compensating

While all fleet managers sincerely hope that they can trust their drivers, the fact remains that the potential for human error is always great. Thus, when fleet managers are relying on the honest and accurate reporting of their drivers, they often end up paying more in reimbursements than they should.

There are, unfortunately, some drivers who will be dishonest about their fueling expenses; some have even gone so far as to forge receipts to try and receive extra money. There are also drivers who will lose receipts or be unable to acquire one and then have to "guess" and "backtrack" to try and determine how much was spent on fueling, which can be wildly inaccurate.

Even paying a little extra, when it’s done frequently enough and widely enough, can have serious monetary consequences for fleet corporations.

Using a fuel card, however, takes away all the guesswork and eliminates the possibility of dishonesty, not to mention the hassle of tracking down and reimbursing receipts.

Rebates

Finally, many modern fuel cards offer some sizable rebates. While every card varies, some will offer as much as a five cents per liter (or more!) rebate. As long as the rebate materials are filled out in a timely manner, they are essentially guaranteed, meaning that conscientious companies can save big money through rebates alone.

When one couples that potential for saving with all the other savings opportunities available, it’s easy to see that fuel cards are the right choice for companies looking to cut costs.

About the Author

This article is written by Tom Nutt, a public relations consultant of PR Point. PR Point is a leading global public relations and communications firm dealing with major oil companies and providing counsel and program development.

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