A common saying in the fleet industry is – fleet costs are one of the largest expense lines for business. If this is true, how do businesses pay for it all and ensure that it is captured in the one place?
Fuel cards issued by the main service station brands would account for the majority of vehicle related transactions because fuel is the main fleet expense.
Paul Holland is managing director at Fleetcor, which acquired the Fleetcard business from GE almost two years ago. He sees a lot of opportunities in the fuel card business.
“Fuel cards are still a growing market. Large fleets are probably saturated and dominated by leasing companies.
“So the opportunity will come from medium-sized businesses that are focused on growth in the early years and don’t think about fuel until it becomes a sizeable expense, then they are looking for a solution.”
Holland also says some industries are open to a higher risk of employee fraud so they need to optimise control and limit the ability of employees to access different services. “Organisations that use subcontractors, casuals or operate under agency relationships need the tight controls and online management that a fuel card can offer to reduce their risk” says Holland.
Fuel cards are often combined into leasing agreements with the management leasing and fleet management organisations. Though not all business lease their vehicles, so there are range of alternatives available to small and large businesses.
Caltex, BP and Viva Energy offer fuel cards for large and small businesses. Their offers range from cards that allow you to purchase fuel or diesel only, to cards that can be used for tyres, servicing and parking.
Fleetcard is accepted at 90 per cent of sites selling fuel in Australia and businesses can get a discount through a partnership with Viva Energy at Shell and Coles Express branded service stations.
Holland says: “Having access to a wide network is important for business. Time is money, so you don’t want your employees diverting off their most direct route looking for the right brand of petrol station.”
The BP Plus card promotes security, convenience and control on their website. Control refers to the ability to limit what the card can be used to purchase and a range of exception reporting that is available online or via email. Cards can be restricted to ULP or diesel only, which ensures employees cannot abuse the system.
From Caltex you can get a card for fuel purchases or upgrade to the StarfleetPlus card, which is a comprehensive fleet management solution that provides access to an extended network of over 3500 merchants offering non-fuel services. They have pre-negotiated rates through selected partner merchants and promise savings up to 20 per cent, according to its website.
Caltex also offers a StarCard debit card, which provides a discount off the pump on fuel and discounts in the convenience stores. It’s pitched at private motorists but seems the ideal card for small business because there is no minimum spend required to earn the discount and you don’t need supermarket dockets.
DISCOUNTS FOR LARGE FLEETS ONLY
Fuel discounts were once only available to large fleets but the supermarket fuel war changed that and now most fuel card providers will offer a discount of some level regardless of the size of your business.
Another popular business payment solution are corporate credit cards. These cards are used for a range of difference expense types and are accepted almost everywhere.
Christine Wakefield, vice president American Express global corporate payments Australia and New Zealand, believes that as the largest provider of corporate cards, a number of customers are already using their AMEX card for fleet expenses.
“Our products can be flexed to suit the requirements of our customers and that includes managing fleet expenses. For example, we know the merchants, and own the merchant relationship so we can lock purchases within a specific industry such as service stations” says Wakefield.
“We can also provide rich transaction data daily, weekly or monthly that customers can upload into fleet management or accounting systems. When you combine this with online card maintenance and a member rewards program with points that don’t expire, it’s a very attractive offer to any sized business.”
There are other specialty payment cards for parking and hotels that are pitched to fleets like Secure Parking’s Advantage Parker Cards. These make sense from an employee productivity viewpoint. If you know all the expenses are related to parking it reduces the administration burden on employees to complete detailed expense claims.
Though cards made not always be the only option for payments. Near field communication (NFC) devices are eliminating the need for people to carry cards and the option of paying for everything with your company issued smartphone would be very attractive to some fleet drivers.
Extracted in full from Australian Financial Review.