Thu, 26 September 2019
The beginner’s guide to fuel cards – Whatever your background or business, no matter what size of fleet you manage or own, fuel cards are guaranteed to save you time, money and effort allowing you to focus on what you do best.
With fuel cards the process of refuelling and expense monitoring is stress-free. With benefits for drivers, business managers and owners alike, fuel cards are the most cost-effective and comprehensive payment solution for your business.
Reduce time spent on administration while providing your drivers with a safe and convenient payment method for fuel and save money on your fuel spend.
This comprehensive, easy-to-read guide will explain everything you need to know about fuel cards, and show you how they can positively impact your business and ROI. We’ll also provide you with the information you need to choose the right fuel card for your needs.
Buckle up, and let’s get started.
Fuel cards are essentially credit cards restricted to fuel related payments. However, fuel cards are more than just a payment solution, and are much safer and more beneficial than credit cards. For more details check out our piece on the differences between fuel cards and credit cards.
Not only can fuel cards be used to purchase fuel, but some fuel cards also allow additional items such as paying for tolls, and certain forecourt purchases such as lubricants, carwashes and shop goods.
Fuel cards can also be assigned to individual driver or a specific vehicle, and can be restricted with a daily spend cap, helping you stay in control of your fuel budget.
There are so many reasons to switch to using a fuel card and we’ll go into each one in greater detail in the next section. Ultimately, fuel cards are more convenient, can save you money, improve fleet efficiency, improve company cash flow, and ensure greater safety and security for your business as a whole, and for your drivers.
The first motivation or consideration for making any business decision usually comes down to one thing: money. “How much will it cost?”, “Is it going to save me money?”, and “Will I see a good return on investment?” are common and sensible questions before any business venture, so let’s apply them to fuel cards.
How much will a fuel card cost?
Most fuel cards have a small annual card fee. This charge is offset by the multiple saving and other benefits that fuel cards bring to your company.
Is it going to save me money?
Fuel cards allow you to easily manage your fuel spend. All fuel transactions are recorded, and with easy to read reports you can pinpoint the inefficiencies of your fleet’s fuel usage.
For example, you might notice that one vehicle is using more fuel than the others. With further investigation you may find that perhaps one driver is being a little too hard on the accelerator or that the vehicle needs servicing. Taking measures to address any such issues is your first step towards reducing fuel spend.
Fuel cards also help reduce time spent on administrative tasks, and time saved is money saved. For example, fuel cards replace the time consuming task of gathering multiple fuel receipts or expense forms from drivers, or comparing those with timesheets. Not only is the process simplified and quicker, but no more lost or missing receipts means that you can reclaim the full amount of VAT due.
It also doesn’t matter if you have different fuel cards, all transactions appear on one simple invoice.
The invoices are also tax compliant, so reclaiming VAT is no longer the time consuming task or resource drain that it used to be.
Will I see a good return on investment?
Fuel cards cost little to set up and maintain, yet the benefits you receive can be substantial and long-lasting. For example, a study conducted by the Energy Saving Trust shows how global brand Red Bull, introduced fuel cards in 2012 and within six months saw a 12% reduction in mileage, and with accurate records, and being able to reclaim for all fuel VAT with the tax compliant invoices they saved an additional £3,500 a month.
Having a fuel card makes refuelling a simpler, faster and easier task for your drivers, meaning that they can be back on the job as soon as possible.
Fuel cards can be combined with a range of innovative tools, such as telematics, which help increase your fleet’s efficiency.
Account management software
Look for a fuel card provider which offers an online management software with their fuel cards. This tool can be accessed via a desktop, tablet or downloaded onto your smartphone and acts like online banking in the sense that you can see all transactions, but it has more advanced features specifically for managing fuel spend. With the online management tool you can view your fuel card activity from wherever you are, it also means that you have a wealth of actionable data at your fingertips.
You will be able to see which vehicles are providing poor MPG, or if certain drivers are using more fuel than necessary. Armed with this knowledge you can take further action to rectify any inefficiencies.
Service station locators
Many fuel cards come with a mapping and locator tool for finding the nearest site which accepts your particular fuel card. The applications can be downloaded to any smartphone, iOS or Android. With the ability to select a journey start and end point, it can highlight all suitable refuelling sites between the two locations and show real-time traffic congestion levels.
You can also filter for HGV sites, 24 Hour stations, Adblue services, and shops, and get directions to all. This simple tool helps reduce the need for long detours to refuel, maximising efficiency and saving money in the long-term.
Many businesses use cash in their day to day dealings, but this can cause cash flow problem when payments aren’t received until a project is completed or the service delivered. This can make purchasing materials or business necessities such as fuel more difficult.
Fuel cards alleviate that pressure through breaking down the monthly cost of fuel into smaller, more manageable bills. Most fuel card providers offer periods of credit payments of 7 or 14 days, which can also give small businesses some breathing space when it comes to cash flow.
Drivers have often been the target of crime for carrying huge amounts of cash for fuel payments along long haul journeys. Opting for a fuel card lowers that risk considerably.
Unfortunately internal fuel theft can be a problem, with employees refuelling personal vehicles with company cash or credit cards. Fuel cards are PIN protected and can be assigned to a particular vehicle registration, plus you can see where and when the cards were used via the account management software.
You can also view all of these transactions on a map for giving you greater visibility. Using fleet management software you can set alerts for refuelling outside certain perimeters. Unusual fuel transactions or suspicious activity can be detected immediately, and lost or stolen cards can be cancelled at the touch of a button giving you more security and control over your fuel spend.
Fuel cards make life easier for everyone involved, drivers, fleet owners and fleet managers. Drivers will no longer have to pay for fuel with cash, save every receipt, or fill in expense claim forms.
With a fuel card, every transaction is automatically logged in an online portal, and detailed on a tax compliant invoice. The tedious and time-consuming task of collecting and analysing each receipt will be a thing of the past, saving you time when it comes to reclaiming VAT.
Having a fuel card makes good business sense whether you have one vehicle or 100. Every business with a mobile workforce faces the same issues when it comes to refuelling, such as inconsistent fuel costs, and reclaiming tax.
Fluctuations in fuel prices can hit small businesses harder but with access to discounted fuel, and competitive rates fuel cards can give you the extra security your small business needs to survive, and to thrive.
According to an article by Business Matters, “one in four fuel expenses are submitted without a receipt”. Without an accurate financial system in place, small businesses often miss out when it comes to reclaiming VAT.
By replacing the need to collect receipts, fuel cards are a simple and cost effective way to ensure your company can reclaim VAT on all fuel and fuel related purchases, helping to improve company cash flow.
There are different pricing options available and which is best for your business will depend on a number of factors. The size of fleet, the type of fuel you require, where you operate and how much fuel you use may determine the type of card and payment option.
There are two main options each with different benefits:
pump related price
fixed weekly price
What is pump price?
Pump price is simply the price displayed on the pump when filling up. This price may change from day to day depending on the market. The main benefit of a pump price fuel card is the extensive network coverage allowing you greater flexibility for refuelling. Additionally, customers can be offered a set pence or cent per litre (ppl/cpl) discount or surcharge against the designated forecourt price on any given day.
What is fixed weekly price?
With a fixed price card your fuel rate is set in advance at the set weekly rate, and doesn’t change even if retail prices shift during the week. This means you always know how much you will pay for your fuel allowing you to stay in control. With prices usually cheaper than the retail pump price, it is a great option to receive further savings on your fuel spend.
Whichever product you choose, you’ll receive a weekly invoice which details all transactions for all the cards assigned to your business.
So whether you have multiple fuel cards, or have purchases for fuel, tolls or lubricants, everything is visible on one single, easy to read invoice.
You can then pay this invoice by direct debit from your business account.
Most quality fuel cards will come with an online account management tool for simple control of all of your fuel cards.
Using an account management tool allows you to stay in control of your fuel spend and improve your fleet’s efficiency. Choose one that provides a variety of reporting options and a smart app to help give you a clear and accurate picture of your fuel consumption.
Use your account management platform to:
Manage fuel cards
Monitor transactions by card or vehicle
Order additional cards
Cancel lost cards quickly and easily
Create bespoke reports on card usage and fuel efficiency
Access historical invoices
Manage your vehicles from your phone with the downloadable app
Most fuel cards are non-contractual, meaning that you can cancel your account at any time with no obligations. Not being tied into a long term contract gives your business flexibility to add or remove cards depending on your business requirements or changes to your business circumstances.
No matter if you are a small or medium sized business with one or a few vehicles, there is a fuel card to suit your specific business needs.
iCompario helps you find the most suitable fuel card, which will give you the best coverage along your business routes, with the best prices for petrol, diesel or LPG. Then all you have to do is fill in a few details on a simple application form, and you’ll be on your way to enjoying the many benefits of fuel cards.
Having fuel cards can save your business money, do your driver fuel expenses claims automatically and make it a 30-second job to reclaim your fuel VAT. As a free comparison site, iCompario can find you offers on cards from all the big oil companies or multi-brand cards, and deals with no minimum purchase or tie-in contracts.