It is crucial for fleets to monitor fuel purchases in order to manage and control fuel consumption. Fuel cards can provide good quality data on fuel purchases, says the Energy Saving Trust Transport Team

A fuel card looks like a credit card, and works in a similar way. It allows drivers to charge the cost of fuel to an account which is settled, usually monthly in arrears, by their employer. Unlike a credit card, interest is not applied to purchases. However, most fuel card suppliers charge an annual fee. Fuel cards are increasingly chip and PIN protected and can be embossed to specific company requirements. At the point of purchase, the transaction is carried out in the same way as with any card. The vehicle registration number and mileage are recorded.
   
The consolidated fuel card invoice which organisations receive shows information including the date, time and place of purchase, the fuel type and transaction value. The fuel card report significantly reduces administration costs compared to other methods of tracking fuel purchases and eliminates the need for receipts. In addition to the detailed invoice most fuel card suppliers will be able to provide further management reporting.

Taking control
A fuel card can provide a simple, convenient and secure way of taking control of your fuel expenditure and improving efficiency. There are five general areas where fuel cards can help. Firstly, fuel cards can help reduce the costs of fuel purchases. Fuel card reporting allows the tracking of fuel spend, the type of fuel purchased and the purchase location. This can help to encourage the use of lower cost sites and the purchase of standard rather than premium fuels.
   
Fuel cards give you the opportunity to better manage the cash flow for fuel since you pay for the fuel purchases on a regular basis every month. You can set limits for fuel card usage, for example to mandate drivers to purchase fuel at supermarkets rather than motorway service stations. Some fuel card providers offer fixed prices while others offer pump price charges. In the latter case, if they cover a wide network of filling stations, this gives you and your drivers the flexibility to select those with the cheapest pump prices.
   
Secondly, fuel cards allow you to accurately separate the costs of business and private mileage. Using a ‘fuel at cost’ approach in conjunction with fuel cards will enable actual private mileage fuel costs to be recovered from drivers. This is a better solution than using a fixed rate per mile as it encourages efficient driving during both business and private use of the vehicle and is the fairest way of determining the cost of private mileage.

Fuel efficiency
Additionally, fuel cards provide information which enables a reduction in fuel consumption. Fuel cards can help to raise awareness regarding fuel efficiency in your organisation through the detailed invoices and other management reports. By monitoring individual fuel consumption figures, individual driver performance can be compared across the organisation. Appropriate measures, such as eco-driving training, can be implemented to promote more fuel efficient driving. Fuel cards will help you to monitor the effectiveness of training.
   
Moreover, fuel cards reduce security risks. Fuel card technology offers benefits in terms of security and functionality versus alternative methods of payment for fuel such as petty cash. Cards can be embossed with the driver’s name or vehicle registration number and the company name providing further protection against fraudulent use. Detailed information on all fuel transactions reduces the potential for employee abuse and provides greater control over legitimate vehicle usage.
   
Finally, fuel cards can aid in the minimisation of administration. Administrative time, cost and effort is reduced by the comprehensive fuel invoices with itemised transactions. Issues relating to lost purchase receipts are eliminated and there is no need for a petty cash fund for fuel purchases with the inherent security problems such payment methods raise. Fuel cards provide transparency on fuel spend and fuel consumption; cards can be allocated to individuals, vehicles or cost centres.
   
The consolidated invoice and associated management reports make calculating VAT much easier and helps to ensure that claims for VAT are made in full. You are able to access your online account 24/7 where you can check fuel transactions, download detailed reports and invoices.

Fuel card considerations
Fuel cards record excellent data, reduce risk and save management and administrative time. Like other payment cards, the choice is broad. Most of them offer more or less similar benefits but some present slightly different features that could possibly better meet your needs. When choosing a fuel card, ensure you understand your organisation’s needs as this will help you select the appropriate provider.
   
Factors to consider include the areas in which your drivers usually travel and where you are based. It is also important to consider how many vehicles you operate and what type of fuel they require. Additionally, the current average monthly fuel cost is imperative to analyse.
   
Based on this information, you can then select the features that you require. The key areas to consider include the price of fuel: some providers offer discounted fuel prices, but usually only to large fleets. It is more common for the forecourt pump price to be charged. Moreover, network coverage is significant: some cards are restricted to only one brand of service station; others can be used at a range of different locations including supermarkets. Management reporting: the level of reporting you receive will vary between fuel card suppliers. Consider the requirements for reporting within your organisation and the detail required and restricting purchases: it is possible to
restrict what is purchased on the card, but this may vary between providers.

Further information
www.energysavingtrust.org.uk