IF your business is not currently using fuel cards then you are likely to be financing your business fleet fuel costs using cash payments, reimbursing driver expenses, or paying by company credit cards.
Unfortunately this is not the most efficient way to deal with fuel expenditure and you can be opening your business up to potential cases of fraud or security risks for your drivers.
Paul Fincham, motor fleet broker for Bluedrop Services, discusses why using fuel cards is beneficial and what you should look for in a provider.
Fuel cards tackle fraudulent claims
Managing your driver’s fuel spend can prove to be highly problematic without ways to accurately record data and keep on top of mileage vs fuel claims. Many fuel cards will track information on fuel tank capacity against fuel purchases, which can be the best method of detecting fraud or suspicious behaviour and picking up such cases easily.
Having systems that can connect these two areas of data means you can instantly flag up scenarios where you have fuel spend with no mileage data against it to detect possible fraud instantly.
A normal ‘pay and reclaim’ system is obviously not automated and therefore the opportunity for over-claiming mileage is high, even if a driver’s intentions are honest.
You can often find drivers adding up their mileage claims and rounding in five’s and 10s to make it easier or to gain financial benefit, but over time even this slight discrepancy in figures adds up.
Even just adding on a few miles is theft and can cost a business significantly and initiate problems with HMRC.
Fuel cards highlight wasteful behaviour
In addition to saving money on fuel expenditure by getting better commercial rates, fuel cards also help to improve fuel efficiency with the provision of detailed information on fuel spend and usage.
This data can help you to identify areas where vehicles may require additional maintenance or highlight drivers with wasteful behaviour that may require additional training to improve performance and efficiency.
Fuel cards pick up trends in data
With companies constantly cutting back, the time and personnel costs involved in analysing mileage claims manually is too high. With the introduction of fuel cards, mileage and other fuel purchases can be linked and analysed behind the scenes quickly.
Data can also be used to pick up trends in terms of things like driver risk and in many cases you can find trends on those that are over-filling, or are more prone to accidents, or perhaps even when use of public transport on different occasions may be more cost effective.
The use of fuel cards will also generally help to improve driver behaviour as your drivers will be fully aware that you are watching them more closely.
VAT reclaims are made simple
Administration and reclaiming VAT on fuel becomes a much simpler and more accurate process using fuel cards, with fuel card providers being able to prepare this information to you no matter what country or tax jurisdiction you need to adhere to.
What to look for in a fuel card provider
You need to ideally look for a system that can help you to transform how you currently manage your business fleet. Don’t just look for something that replicates what you currently do on paper.
A system that can help you to analyse data and identify ways to cut your costs or reduce downtime will help you to go beyond your current capability so be sure there is added value.
In addition to this it is also always important to ensure that the new system can integrate with your current programs and data sources in-house, so don’t overlook integration.
- Paul has 24 years’ experience in the motor insurance industry and has a wealth of knowledge having started within regional broking as an account executive for ten years prior to moving into Underwriting with AXA, LV & Andeva Underwriting Agency Ltd. As Motor Fleet Broker for Bluedrop Services, Paul specialises in Motor Fleet Insurance and offers advice and support to customers managing Motor Fleets.
