7FLEET OWNERS MAKE

DEADLY MISTAKES

AND HOW TO AVOID THEM BY USING A FUEL CARD PROGRAM

Randall-Reilly Business & Media Information - 2012

INTRODUCTION

SEVEN COMMON MISTAKES BUSINESSES MAKE By Carolyn Mason

Randall-Reilly Media & Information Services

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o you know for certain that your drivers are using company fuel strictly for company business? Can you account for all of their purchases based on a shoebox full of credit or debit card receipts?

If the answer is unclear to either question, you probably don’t have a fuel card program. In today’s tough economic climate, there is little margin for tolerating employee theft. Seemingly innocuous slippage can reduce profits, hurt morale and end up costing you more than a tank of fuel. More companies that use vehicles for business use are using fuel card programs to reduce theft. These programs provide detailed purchase and fuel-economy information on every employee that operates a company-owned vehicle. It doesn’t matter how many vehicles your business is using — if you don’t control fuel spending, you will reduce profits. As fleet managers struggle to maintain vehicles and account for their costs, it’s important to manage every aspect of your fuel purchases. We will look at seven common mistakes made by business owners who operate company vehicles, and ways a dependable fuel card program can help minimize these problems.

DEADLY MISTAKES

1 2 3 4 5 6 7

Assuming your employees are always honest Assuming you know how much fuel your fleet uses Hassling with fleet management issues that consume your valuable time Purchasing fuel without cost saving strategies Lacking information to provide detailed employee purchasing information Ignoring negative spending trends Failing to use fuel card information to manage employees

MISTAKE NO. 1

ASSUMING YOUR EMPLOYEES ARE ALWAYS HONEST

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t’s a common (and understandable) assumption that people you have hired, trained, paid and mentored will return the favor by doing their job honestly and competently.

After all, why would they bite the hand that feeds them? Most employers assume their employees are trustworthy, or they wouldn’t have hired them in the first place. Unfortunately, statistics about employee theft don’t back up those assumptions. In fact, according to a study from the U.S. Chamber of Commerce, an estimated 75 percent of all employees steal at least once. Half of these steal repeatedly.

The American Society of Employers estimates that 20 percent of every dollar earned by a U.S. company is lost to employee theft.

Even the ones who would never take a dollar from your cash register may not consider it a big deal to fuel their personal car and turn in a credit or debit card receipt. They may feel it is “owed to them,” or is a perk of the job. “Everyone does it.”, is a common excuse when caught red-handed. And many otherwise upstanding citizens don’t see the harm in helping themselves to a few gallons of gas. After all, what’s a little extra gas really going to cost the company? And why not throw in a six-pack of soda and a few gallons in the spouse’s car as well? If they are using cash or a credit card, there is no accountability, no brakes on personal usage and no way to get caught. They may think, “Who is it going to hurt?” The answer — it’s going to hurt you, and more than you might think.

BY THE NUMBERS

75 50 33 50

percent of employees steal at least once percent of those who steal, steal repeatedly percent of business failures is the result of employee theft billion dollars annually in the U.S. is lost due to employee dishonesty

Source: U.S. Chamber of Commerce & American Management Association

Solution: A fuel card program removes the temptation to casually cheat on fuel expenses. Fuel card programs usually require an employee PIN number and odometer reading before they are processed. That simple check and balance keeps track of miles per gallon and keeps employees from creative receipt writing. Once they realize their purchases are recorded and matched with odometer readings, you have removed the temptation to cheat and increased their accountability. There is virtually no way around the system. With the checks and balances in a fuel card program, employees who routinely are out of line with fuel expenditures are easily red-flagged. Fleet managers can add controls to their fuel cards, such as eliminating non-fuel purchases to account for beer, cigarettes, etc. or setting limits on fuel expenditures. Transaction information is immediately available online and problem employees readily identified.

MISTAKE NO. 2

ASSUMING YOU KNOW HOW MUCH FUEL YOUR FLEET USES

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hen fuel was cheap, fleet managers did not routinely worry about knowing their cost per mile. In fact, managers could count on fuel costs to remain fairly constant and budget based on known fuel consumption. Today, with wildly fluctuating prices, improving fuel economy If you can can result in cost savings you can’t afford to lose. measure it, you can If you are basing a 2012 on 2011, consider manage it. budget the fact that the diesel price as of January 2012 is $3.854, $0.447 higher than this time in 2011. Gasoline is $3.391 as of January 2012, up $0.287 from 2011. Solution: Fuel card programs offer significant business intelligence including detailed mileage and cost per mile data. Fleet managers can evaluate vehicles’ fuel efficiency, make future expenditures based on controlling costs and evaluate fuel locations based on gas price fluctuations. The only way to know how efficiently your employees drive is to have good information on individual vehicle fuel consumption. If you can measure it, you can manage it.

MISTAKE NO. 3

HASSLING WITH FLEET MANAGEMENT ISSUES THAT CONSUME YOUR VALUABLE TIME

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re you and your managers mired in the laborious task of monitoring employees? It’s an enormous waste of valuable time to record and account for employee fuel purchases when they turn in a shoebox filled with incomplete records, receipts with little identifying information and lost receipt excuses you have to account for.

used to fuel at one designated service station. “The guys would sign in on a clipboard before fueling their vehicles. What a difference it is now with easy-to-read reports, extensive fueling locations, secure card system and excellent custom service,” Coughlin says. Now he can get instant access to the information he needs to manage his fleet.

Turning all of that into accurate information for Some features fuel card reports provide include: taxes, purchasing and planning purposes is often g Individual driver transactions by date an exercise in frustration. Solution: Fleet managers using a fuel card program can identify and control purchases in real-time and monitor them online.

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Dan Coughlin, Director of Fleet Services for Commonwealth Limo, manages 220 vehicles in the Boston/New York City areas and is happy with their decision to use WEX Fleet One’s Card Program. Things have changed for the better from back in the days when their drivers

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Card, unit and state transactions by date Line-item details to see exactly what was purchased Miles per gallon for each vehicle Last transaction or attempted transaction by a particular cardholder Weekly transactions by driver ID number or employee name

MISTAKE NO. 4

PURCHASING FUEL WITHOUT COST SAVING STRATEGIES

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re you getting the price breaks on fuel you could be getting? The days of “buy now, analyze later” are gone, and you may be losing a competitive edge if you don’t take advantage of a fuel savings programs. Solution: A good fuel card program can offer savings such as identifying locations offering rebates and fuel specials, provide account information for federal taxes on gas and diesel purchases, monitor driver fueling activity and eliminate credit card transaction fees.

Andrea Carmen, operations manager for Philip Sims Trucking in Otis, Colorado, oversees the operation of 13 company trucks and coordinates owner-operators hauling livestock and specialized equipment. She likes the hassle-free system of using a fuel card program and uses a GPS tracking system to evaluate idle times, set up alerts for fuel discounts and track fuel economy.

“With today’s volatile diesel prices, you have to You can plan your purchases by using a fleet card keep track of your fuel economy and stay on top program’s mobile site locators to provide up-to- of your drivers to make sure they are maximizing date discounts and fuel price specials. efficiency,” Carmen says.

MISTAKE NO. 5

LACKING INFORMATION TO PROVIDE DETAILED EMPLOYEE OPERATING INFORMATION

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hile you may think you know who your top performing employees are, the numbers may show otherwise. The mentality of “nobody ever washes a rental car” may also influence employees driving company vehicles. They run them hard and don’t always operate using solid fuel efficiency procedures. Without accurate data, it’s impossible to make good management decisions. With added benefits of using fuel card programs with GPS systems, you can view routes taken, idle times and other driving habits. Solution: Fuel card programs individual employee expenditures.

provide

detailed

The daily or weekly reports give your fleet managers access to employee fuel expenditures. You can monitor those who are getting better miles per gallon and performing regular maintenance, and plan their routes to maximize fuel savings.

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Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information. Peter Drucker Management Author

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MISTAKE NO. 6

IGNORING NEGATIVE SPENDING TRENDS

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hen fuel costs rise, it’s natural to lump all negative spending trends into the fuel price pot. But some of the rising costs may be due to other factors.

Solution: Fuel card programs provide information that can help you identify negative trends and correct the course. No matter what the information indicates, employee theft, inattention to optimal fuel economy driving habits or lack of access to fuel discounts and specials, information is key to implementing procedures to reverse downward trends. With a good fuel card program, you have access to accurate data that fleet managers need to make their best informed, fact-based decisions.

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There is no substitute for accurate knowledge. Know yourself, know your business, know your men. Lee Iacocca

Former Chrysler CEO

”

MISTAKE NO. 7

FAILING TO USE FUEL CARD INFORMATION TO MANAGE EMPLOYEES

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nce you receive the comprehensive data a fuel card program provides, it’s easy to note the red flags and obvious areas for improvement. You will gain immediate value by eliminating fraud and terminating cheating employees. While this will offer immediate cost savings, don’t overlook further opportunities to create programs to motivate employees to drive more efficiently. Solution: Once you have the fuel information, consider implementing employee training to utilize best practices for fuel efficiency.

and air conditioner use. Many fleet managers provide incentives to employees who increase their vehicle’s miles Whether you use a carrot or stick approach to per gallon. Even a measure as easy as keeping encourage best fuel economy practices, you now tires inflated to the proper pressure can improve have the means to measure the results. mileage by up to 3.3 percent. Driving five mph over the 60 mph speed limit adds an additional $0.27 cents per mile to your gasoline bill. Excessive idling can use a quarter to a halfgallon of fuel per hour, depending on engine size

Fuel card reporting makes it easy to see exactly how many miles per gallon your vehicles are achieving and which drivers produce the best numbers.

CONCLUSION

STRATEGIES FOR USING A FUEL CARD PROGRAM

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implify management, eliminate employee fraud, control driver spending, increase company fuel efficiency and enhance purchasing decisions by partnering with a dependable fuel card program. The better information you have, the more informed management decisions you can make. A fuel card program may be exactly what your fleet needs to run more efficiently in a tough economic market, where every savings can impact your bottom line. Andrea Carmen, operations manager for Philip Sims Trucking says WEX Fleet One’s superior customer service is the number one reason she chose their fleet card program. “I know when I pick up the phone to call with any issue, I am their top priority. That’s the most important factor to consider when deciding what fuel card company is right for your fleet.” Here are 13 services to look for in a fuel card program: g

Plentiful locations with smart phone applications and online site directories.

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Excellent customer service tailored to your company’s needs.

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Real-time purchase and payment control

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Electronic payment options

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Easy-to-read reports

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Enhanced security procedures

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Reports for individual driver transactions by date

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Information on card, unit and state transactions by date Data showing miles per gallon for each vehicle Ability to quickly order additional cards or replace lost, damaged or stolen cards Downloadable invoices, activity reports and raw data files Available GPS systems to track vehicles Merchants searchable by site, city, state, county, amenity or any combination

www.FleetOne.com . 1-866-51SALES Resources Fleet One: Partners in Business: U.S. Department of Energy:

www.FleetOne.com http://goo.gl/k7BZR http://www.fueleconomy.gov/