Fuel cards have become an essential tool for organisations that have a fleet or regular fuel expenses. In this article, we will explain how fuel cards work and discuss the main advantages of using them as a business.
What is a fuel card?
A fuel card is essentially like a credit card but specifically designed for purchasing fuel and other related expenses. It's used by employees who regularly drive company vehicles or their own cars for business purposes. Unlike the traditional way of reporting expenses, fuel cards allow them to fill up their vehicles without using their own personal card or cash. Besides the basic convenience, fuel cards offer many other benefits for businesses.
Cutting Costs
When using fuel cards, businesses can often benefit from various discounts. While many standard offerings tend to range around 1–2p per litre, some providers, including the Allstar One fuel card, offer savings of up to 8p per litre of diesel with their Discount Diesel offering. While it may not sound like a lot, it certainly adds up over time, given the amount of fuel purchased by some companies.
Admin Simplicity
Fuel cards can simplify the administration of fuel-related expenses significantly. Instead of having to chase employees and deal with multiple receipts, fuel card systems sometimes automatically generate one consolidated invoice. Not just that, the invoice may already be HMRC-compliant and ready to be submitted for claims. This could reduce the amount of paperwork needed, streamlining the task for your accounting teams.
Time Savings
Fuel cards often come with digital management systems that centralise everything you need for admin in one place. From real-time spending data to automated reports, this could drastically reduce the time spent on manual tasks. In addition to this, vehicle performance tracking can help identify maintenance needs as early as possible, which would allow organisations to plan for it to reduce downtime better in the long run. All of this can add up to hours of saved time each month across your business.
Full Financial Control
The financial benefits of fuel cards can go beyond direct cost savings. With features like set purchase controls for drivers and clear audit trails for all fuel-related transactions, these systems can often provide you with a 360-degree visibility of your finances. It can improve cash flow management, provide you full control of your expenses, and even help you make informed financial decisions going forward.
Fleet Management Improvements
Modern fuel card systems may also offer various fleet management tools that can further help businesses oversee and improve their vehicle operations. Companies can often track fuel usage patterns with precision for each vehicle. Even driver behaviour can be monitored, generating detailed efficiency reports for your staff. Such insights can help you identify areas where resources can be allocated better and the overall fleet performance can be optimised.
Enhanced Security
With modern security measures in place, fuel cards can also be a safer way to manage expenses than many traditional payment methods. Each card can be assigned to a specific driver or vehicle, and transaction limits can be set. Unlike with regular bank cards, business owners can have peace of mind knowing that fuel card purchases are restricted to fuel only. The ability to monitor all transactions efficiently ensures that there is no unauthorised use for personal purposes.
Final Word
Fuel cards are often not just a practical but a transformative solution for businesses that wish to control their fuel expenses. Besides protecting you against fraud, they can be designed to automate all related processes and provide complete control over your finances.
