Managing the Financial Side of Commercial Fleets

Pros & Cons: Using a Purchasing Card for Fuel

March 2010, by Staff

Fleet managers know fuel amounts to some 70 percent of fleet variable costs, more or less, depending on fuel prices. They also know the key to managing that huge expense category is the detailed data each transaction generates. Finally, they know if they can capture odometer readings from every fuel transaction, their entire cost reporting process will be up-to-date and as accurate as possible.

In recent years, however, other company functions have become involved in the selection of fleet programs, most notably strategic sourcing and purchasing. These functions bring their own goals, and those goals don't always mesh with those of the fleet manager. The use of a corporate purchasing card is one area of expertise sourcing and purchasing staff often attempt to bring to fleet, and with it, some advantages and disadvantages.

Fleet Needs Prompt Fuel Card Program Development

Fleet fuel card programs came about some 25 years ago in response to several needs:

■ Wide card acceptance.
■ Expense data (level III).
■ Controls on use.
■ Incorporation into fleet program.

There may have been others, but these were the primary needs. The difficulty fleets had in capturing critical odometer readings made a universal fleet fuel card program a godsend. The bottom line on fleet fuel card programs is they have become expense management tools, rather than simple payment solutions.

Purchasing Cards Offer Data & Online Tools

Purchasing cards (P-Cards) have been around far longer than fleet fuel cards. Based on a credit card or charge card platform, purchasing cards are used for any number of business needs:

■ Office supplies.
■ Office equipment.
■ Travel/entertainment.
■ Meeting expenses.

And more. Purchasing cards offer the user Level III data - not only the purchase dollar amount, but the merchant, type of purchase, date, employee, etc. The card is used as not only a purchasing solution, but a management tool as well.

Purchasing cards offer online tools for reporting, universal acceptance (figuratively), and often a level of issuer revenue sharing (rebates) based on volume or average transaction size.

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