WITH fuel prices nudging 120ppl for a litre, businesses must start to manage their company car fuel expenditure – or let costs spiral out of control. By Neville Briggs, managing director of fleet software company, CFC Solutions.“Savings in fuel expenditure of 5-10% are reasonably common.”
BUSINESS car managers must take this opportunity: to take control of your company’s business car fuel costs. The impetus to do this has been provided by the recession and likely future price rises as the cost of both petrol and diesel heads towards 120 pence per litre with or without any increase in fuel duty. In our view it provides ideal momentum for action.
It’s one of the reasons we have been advising business car managers for years that fuel is a key area where costs can be reduced. However, it has always been a difficult ‘sell’ thanks to lack of understanding about how petrol and diesel buying and use can be managed, so take up has been low.
However, now is the time when business directors can push for genuine change. The fuel price increases being forecast are considerable and, combined with the pressure for cost cutting created by the recession, they should receive director board backing.
A common misconception by company directors is that nothing can be done to control fuel costs and that price increases simply have to be accepted and suffered.
But our experience is the opposite. Fuel is a major expenditure for most companies with business cars and responds very well to managerial control. Savings in expenditure of 5-10% are reasonably common.
How can fuel cost savings be achieved?
To take control of fuel expenditure we would advise a business to issue fuel cards and link them to fleet software – in this way you have both control and analysis.
Fuel cards bring control at the pump – you can stipulate where fuel is bought and choose cheaper suppliers, stop fraud such as filling up non-business cars, and gain the data on expenditure provided by the fuel card company.
This data can be effectively mined to provide a complete picture of fuel use across your company’s cars, putting in place measures such as fuel consumption exceptions, where the fuel software will automatically indicate where MPG targets are not being met.
By this we mean instances where poor drivers use 20% more fuel that other drivers in identical cars over similar journeys. The software gives you the ability to identify these drivers – or their vehicles if there is a fault on the car and take action.
Another advantage is that having a detailed analysis of your fuel expenditure also provides clear financial justifications for better utilisation of your business cars through measures such as car sharing or alternatives to travelling such as video conferencing, or rail travel.
If you can show that sales team members can save a definite amount by car sharing to destinations, then you are presenting your argument from a firm footing.
But the biggest argument for the implementation of fuel cards and fuel analysis software is simple: the rising cost of fuel. Take control of the cost of fuel to your business. It’s an issue which you really can address.
