Fuel cards offer a variety of benefits for businesses and fleets, including gallon discounts on diesel fuel, savings on maintenance and emergency repairs, transaction fee elimination and fraud prevention. Additionally, fuel card providers negotiate discounts with specific truck stops and allow fleet managers to set limits on spending areas such as food and other supplies. The modern fuel card comes with a dedicated app that lets you see activity in real-time and pull reports as needed. By using fuel cards, fleet managers can save time and money while also making it easier to manage their fuel expenses efficiently.
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Understanding Fuel Cards
As fuel remains the highest expense in the trucking business besides vehicle maintenance, opting for a fuel card can significantly reduce those costs. Essentially, a fleet fuel card is a payment instrument that serves as a useful tool for businesses to manage their fuel expenses better.
In essence, a fuel card works similarly to a credit card. The only difference is that it is restricted to be used only for buying fuel-related products. When drivers use these cards, transactions are recorded and can be tracked with ease, saving companies vast amounts of time and effort. Since monitoring expenses can be tedious and complicated, the use of fuel cards can help companies avoid the hassle of reconciling receipts and manually tracking all transactional details.
To put it into perspective, let’s say you’re running a logistics firm where you need purchasing invoices for all expenses based on your truck drivers’ transactions from buying fuel to service station charges. Without such an arrangement, accounting staff will need to check for tickets. They may also need to gather receipts from all employees who have been on tour using their personal cash or credit using traditional bookkeeping methods.
However, when companies opt for fleet fuel card services like Wilmar’s premier fleet leasing and management company services, this eliminates the requirement for manual reconciliation at each point of sale location or if split by departments or users within departments via detailed reports.
Some might argue that implementing fleet cards comes with extra costs compared to other payment methods. However, using a fuel card program such as Wilmar’s system which allows transparency of information related to purchase history and spending approvals at designated places avoids cost gluttony. Thus, there would be no need for multiple checks over records attached to different fuels purchased individually by each driver across various locations.
With this background now given about what fuel cards are and how they work, let’s explore how fuel cards can help you and your business in greater detail.
How Fuel Cards Work
As mentioned earlier, fuel cards are designed for buying diesel products and expenses at gas stations. When the card is swiped, the fleet card provider will have a discount agreement with particular stations, then extended as grants to customers registered with that benefit program. This means that fleet management companies like Wilmar can help businesses set up better agreements and boost long-term savings on fuel expenses without putting any restrictions on their daily operation routine.
While some fueling transactions might have different taxes depending on various state laws, a fuel card will always consolidate all of these taxes, making life easier for drivers. For instance, while a hauler that buys gasoline adds federal road usage fees along with state sales tax, a truck carrying diesel fuel doesn’t need to pay the same road usage charge in Texas where the car gets registered.
Dealing with different regulations and purchasing cards that comply with various jurisdictions can be a hassle if you’re running a trucking business across multiple states. Without a fuel card system in place in this situation, companies would require different payment methods suitable for every location they operate in.
However, using fuel cards streamlines everything, making it more manageable to track spending limits or expenses specifically allocated for food or other supplies. With firms like Wilmar providing online access to detailed transaction records and easy-to-use analytics tools, monitoring specific areas becomes manageable. This way, management can quickly identify if there has been any anomaly or improper use of company resources.
To put it simply, fuel cards are like travel credit cards designed exclusively for fueling-up purposes- kind of like having an omnipresent financial tracking mechanism available through the web portal to scrutinize expenditures or drivers’ activities across networks of liquid suppliers.
Now that you understand how fuel cards work let’s move into a more in-depth discussion on the benefits of the same designed for businesses.
Benefits for Businesses
Using fuel cards has many cost-saving benefits for businesses operating fleets of vehicles. One significant advantage is saving time while also keeping drivers and vehicles on the road longer.
By centralizing fuel purchases, you reduce the amount of time drivers spend on paperwork and administration tasks. Eliminating the time spent waiting for re-imbursements and gathering receipts makes tracking expenses more accessible and less time-consuming.
According to a survey conducted by Fleet Financials Magazine, companies that switch to a fuel card program can save an average of 15-20 hours per week in administrative time. That provides managers with more time to focus on fleet optimization strategies such as preventive maintenance programs to ensure efficient fuel consumption and fewer breakdown costs.
The main advantage of fuel cards is the savings they offer when purchasing fuel. Carriers using fuel cards can receive significant discounts on diesel fuel, saving them approximately 40 cents per gallon. If you’re like most carriers, this could translate into $12,000 a year in savings or even more depending on your annual fuel consumption rate.
As a small business owner, I have experienced how fuel cards provide savings while streamlining the purchase process. Before switching to fuel cards, we were handling transactions through individual driver credit cards, resulting in higher air-miles expenses due to unearned rewards points.
Fuel card programs are comparable to loyalty programs run by credit card companies or airlines – for instance, you earn points with each purchase that can be redeemed later, incentivizing customers to use their services more frequently. In return for bulk purchasers’ loyalty revenue streams while offering enhanced features such as accounting integrations and complex reporting options.
Critics argue that the reduction in transaction fees supplied by using a fuel card system is negligible compared to similar discounts already available from vendors like Costco, Farmers Coop Gas Association or other trusted brands that provide gas stations nationwide. But most importantly is that with a dedicated card specifically built for lease providers’ needs; carriers can work with any broker or shipper, giving more flexibility in choosing their preferred loads.
Cost Savings and Convenience
Fuel cards offer many benefits that can save businesses both time and money. With fuel cards, fleet managers can negotiate discounts with specific truck stops and receive perks that can help with fleet management or give owner-operators an edge. Using fuel cards offer average savings of 40 cents per gallon, which amounts to a total annual savings of $12,000. This means more money can be invested in other parts of the business.
For instance, imagine a business owner who manages a large fleet of vehicles for deliveries across the country. With fuel cards, they can keep track of each driver’s gas expenses and make sure they’re not overspending on fuel. They can also set spending limits on non-fuel purchases, ensuring drivers only spend what they’re allowed to spend on any given expense area.
Fuel cards eliminate transaction fees that are often associated with traditional payment methods like credit cards or cash payments. These fees can add up over time, especially when making frequent fuel purchases. By switching to fuel cards, these transaction fees are eliminated from the equation.
For example, traditional payment methods could result in high transaction fees for paying tolls or parking charges while using fuel cards eliminates the need for cash transactions altogether, resulting in less hassles and more convenience.
Some may argue that fuel card programs come with monthly service fees or other hidden costs that may outweigh their advertised benefits. However, many providers offer programs without any hidden costs or additional fees.
In the end, the cost savings and convenience provided by fuel cards make them a smart investment for businesses looking to streamline their operations and cut down on expenses.
Enhanced Security and Monitoring
In addition to cost savings and convenience, enhanced security measures are another benefit of using fuel cards. Fuel card providers require a PIN to be inputted before every purchase, reducing the likelihood of theft or fraud. With spending limits and real-time reporting, the likelihood of fraudulent activity is reduced and easier to detect.
Consider a situation where a driver loses their traditional payment methods like cash or credit cards while on the road. By using fuel cards, drivers can still make necessary fuel purchases that are crucial to maintaining their delivery schedule without having to worry about covering the costs out of pocket.
Fuel card programs come with in-depth reporting of fuel card transactions that make it easier for business owners to monitor their fuel expenses and identify any unusual spending trends. In addition, fleet managers can receive alerts when card balances are low or when attempts are made to overspend.
Some may argue that the use of fuel cards and electronic transactions increases the risk of cyber attacks and data breaches. While it is true that all transactions carry some level of risk, dedicated fuel card providers employ state-of-the-art security measures that protect against such events.
Utilizing technology without proper security measures is akin to leaving one’s front door unlocked when leaving the house. Just like how homeowners install security cameras, alarms, and deadbolts on their doors for protection, businesses need to take similar measures to secure their electronic financial data.
Enhanced security and monitoring features provided by modern fuel card programs bring a higher level of protection and transparency to businesses aiming for success in today’s fast-paced world.
To sum up; accepting fleet cards more than simply benefits the owner-operator or fleet managers. It also provides critical advantages to retailers such as increasing revenue, increasing security, and building customer loyalty. By taking advantage of these benefits, retailers are able to grow their own businesses significantly while changing their role from just another gas station on the road to an essential resource in supporting America’s transport industry.
Real-time Reporting and Spending Controls
The ability to monitor fleet activity in real-time is crucial in modern fleet management. Real-time reporting allows businesses to see where their money is going, how much is being spent on fuel, and who is doing the spending.
With real-time reporting, you don’t have to wait until the end of the month to find out how much was spent on fuel or other expenses. Instead, you can see transactions as they happen, allowing you to make more informed decisions about how much or little to spend.
Spending controls provide an additional layer of protection against unauthorized purchases. You can set limits on individual drivers or categories of spending such as food or maintenance supplies. This ensures that drivers only purchase what they need while staying within budget constraints.
In addition to controlling spending categories, you can also limit where fuel cards are accepted for use. Many providers allow businesses to choose which retailers are eligible for discounts and which ones are not. This feature increases control over non-fuel expenses while also reducing instances of fraudulent purchases.
Finally, real-time reporting makes it easy to track exceptions and anomalies in purchase behavior. With real-time data available at your fingertips, you can easily identify trends in fraudulent behavior and make necessary changes to avoid any repeating issues.
For example, if you notice an unusually high number of transactions late at night, you can investigate why this is happening. Is it drivers using the cards for personal use, or is there another, more innocent explanation? Without real-time monitoring, you may not be able to identify these patterns until weeks after the fact.
Real-time reporting and spending controls are two vital features that businesses cannot ignore. Fleet managers who utilize these tools can quickly identify problem areas and make changes that improve overall performance. This leads to significant cost savings over time and contributes to a more efficient fleet as a whole.
Some critics argue that real-time reporting can lead to micromanagement of employees and generate unnecessary stress. However, with clear communication and a focus on transparency, this potential issue can be mitigated.
Think of these features like having a GPS for your fleet’s spending behavior. You can navigate routes before they become problems, make adjustments in real-time, and ultimately reach your destination – better fleet management.
