Despite various developments, fuel remains one of the costliest expenses for businesses. Moreover, the worst part is that it is not yet fully possible to avoid fuel purchases. However, with a few simple steps, you will be able to streamline your fuel purchases. All you require is a fuel card for your business.
Primarily, fuel cards are one of the best investments for businesses that are involved more in field services. This way, you will be able to manage your fuel expenses better. Apart from that, this will also be quite beneficial for your drivers. Moreover, fuel cards also offer more security and improve business efficiency.
Read on to get a better idea of how fuel cards for businesses work and how your business will benefit by using them.
What Are Fuel Cards for Businesses?
A business fuel card is a simple tool with the help of which you will be able to manage fuel purchases for your business. Basically, it works similarly to a credit or debit card. However, you only use the fuel card to buy fuel at a service station of that fuel company.
In general, fuel cards are really useful for field-based businesses or fleet operators. In this case, drivers use those cards to pay for fuel for their vehicles. Basically, they will not have to pay cash. Also, the transaction is recorded in the database, which the company tracks.
Some of the major features of fuel cards are expense tracking, budget management, expense consolidation, discounts on bulk purchases, etc. Moreover, a wide range of vehicles are applicable for using fuel cards. Hence, these cards are best for businesses having diverse fleets.
What Are the Pros of Using Fuel Cards?
The following are some of the major benefits of using fuel cards that you must know about:
1. Save Money
A major benefit of using fuel cards is that you will have access to fuel discounts (especially if you make bulk purchases). This is quite common with fleet-based businesses. In fact, even discounts of a few cents add up over time and add to the business revenue. However, only a few fuel provider provides those discounts.
2. Better Expense Tracking
In general, fuel cards record all transactions and offer comprehensive information on how much fuel you use. Hence, you will have full visibility of how much fuel your drivers have taken. This way, you will be able to monitor fuel costs. As a result, you will be able to optimize your fuel budget.
Apart from that, you might also set spending limits on fuel. Moreover, you might even restrict purchases on specific types of fuel. Furthermore, it also offers you the option to limit transactions from time to time.
3. Streamline Payment Processes
Since your drivers do not have to pay out of their pocket, it shows that fuel cards actually simplify the payment process. In this case, it is the company that is paying directly all the fuel costs to the fuel supplier center. As a result, you are working to streamline your expense management.
Moreover, your accounting team will also not have to do a lot of catch-up. Thereby, you will be able to focus more on tasks that add real value to your business.
4. Manage Fuel Surcharges
When they want to cover the higher costs of fuel, most companies charge fuel surcharges. However, with the help of fuel cards, you will get all the data on fuel costs. Hence, you will have access to real-time data from your own business fleets. This way, you will be able to manage your surcharges better.
5. Attainable Despite Low Credit
Interestingly, most fuel cards are attainable for most carriers. In fact, even if you have poor credit, you will be able to access a fuel debit card or prepaid fuel cards. Basically, with the latter option, you will not have to worry about credits. This is because you are just buying the value of your card in advance.
What Are the Cons of Using Fuel Cards?
The following are some of the major cons of using fuel cards that you must be aware of:
1. They Are Expensive
Most fuel cards come with transaction fees, annual fees, and discount fees. For instance, on average, you have to pay 2.27 -7.43 GBP per card per month for some fuel cards. Apart from that, you will also have to pay interest rates and other charges. Hence, before you choose a fuel card, you must review your terms and conditions.
2. Some Fuel Card Rules Are Complex
Some fuel cards come with complex rules and regulations for users. Apart from that, many fleet managers complain that it takes a lot of time to go through the rules and all the data that accompany fuel cards. In addition to that, it is also difficult to track multiple cards. Hence, you will have to plan ahead.
3. Not Available to All
Although most fuel cards are accepted at major fuel stations, some are only usable on specific networks. Hence, many drivers find it inconvenient to drive. Basically, they have to plan their fueling stops and find a fuel station that supports the fuel card they are holding. Otherwise, in cases of emergency, they might have to pay out of their pockets.
4. Chances of Fraud
There are always possibilities of fraud with fuel cards. For instance, if a driver does not follow company policies or if someone steals the card, you might face a fraudulent purchase.
In general, not every fuel card will stop the purchase that falls outside your guidelines. Hence, if you want to reduce the chances of fraud, you will have to stay on top of purchasing data.
Get a Fuel Card Now
Whether you should get a fuel card or not depends on your fuel requirements and current business situation. However, to ensure you get your hands on the best fuel card provider, you have to do some research.
