7 Easy Ways That Fleet Managers Can Keep Track Of Company Expenses

The efficient management of a fleet plays a vital role in improving the profitability of the company. The purpose of fleet management is to improve efficiency, productivity, reduce transportation, and personnel costs.

Fleet managers play a vital role in the smooth operations of the vehicles. While they have a variety of options to keep track of company expenses, fleet managers don’t have much leeway in controlling the fixed cost since it’s predetermined.

However, variable costs can be reduced considerably through effective tracking. Here are 7 ways to keep track of expenses:

Under-Inflated Tires

As per a test, a tire under-inflated by 20% will wear out 20% faster, meaning that an average tire life of 25,000 miles is reduced to 20,000 miles before needing to be replaced.

Tire replacement is a huge cost, and tires need to be utilized optimally. Fleet managers can put in place a process to check the health of tires. Drivers must also be trained at regular intervals to reiterate best practices in tire management.

The Cost Of Fuel

Fuel costs account for a significant portion of the operating costs of vehicles. Fleet managers can look to buy fuel when prices show a downward trend and take some extra care to choose the appropriate fuel card most suitable for their fleet.

Since poor driving behaviors can influence fuel consumption considerably, they should be curbed through appropriate monitoring and intervention through training for errant drivers.

Also, fleet managers should keep a close eye on the fuel cost per mile. Ideally, the larger the fleet size, the lower the price of fuel.

Fleet Repair And Maintenance

It’s vital to keep a tab on the repair frequency of vehicles and put a preventive maintenance plan in place. A detailed cost-benefit analysis can help fleet managers decide between outsourcing repair and fleet maintenance to the outside vendors or sticking to in-house workshops.

The service level agreements with the third parties need to be scrutinized closely, and the focus needs to be on value for money; if outsourcing results in a longer downtime for a vehicle, it might be better to look at in-house repair options.

By planning, scheduling, and performing the appropriate maintenance at the right time, fleets will have a safer, more reliable, and more cost-effective operation.

Insurance Cost

Insurance is among the biggest expenditures and makeup 10%-15% of a fleet’s total cost of ownership. Nonetheless, fleet managers can lower the rate of annual insurance premiums, since the insurance market is very competitive, and insurers are vying with each other to offer the best possible deals.

The type of insurance policy that fleet owners purchase should be based on risk assessment for different kinds of vehicles and the corresponding claims history.

Driver behavior is also an important factor in the determination of premiums, and this cost can be mitigated through studying driver data via telematics. To understand how telematics works, discover more at Samsara.com.

Vehicle Usage

It’s essential to make good use of all the vehicles in the fleet. Keeping track of the miles traveled each day can give fleet managers a good idea of the utilization of vehicles.

Based on a close study of data on fleet usage, you may discover that certain vehicles are lesser used compared to others. The best course of action would be to recommend the disposal of such underutilized assets as these also incur expenses.

Fleet managers can make use of asset management software to seamlessly track the utilization of the vehicles and recommend an appropriate time to dispose of the trucks.

Driver Retention

The drivers are a significant part of the system when we try to define fleet quality. Motivated drivers will take their job seriously, and exhibiting the right practices will help lower expenses like fuel, repair and maintenance, and insurance.

Fleet managers can ensure that they pay attention to the drivers’ needs and try their best to keep them satisfied. Offering flexibility in terms of schedules and rewarding professional behavior will show drivers they are cared for, thereby enabling them to contribute to the overall success of the company.

Inventory Replacement Strategy

Fleet managers might be tempted to extend the lifecycle of fleet vehicles. However, all vehicles have a lifetime—if vehicles are stretched, they might prove more expensive than the timely purchase of a new vehicle.

As vehicles age, fleet managers might be spending up to $70 a month on maintenance costs alone. Generally, during the first 50,000 miles, preventative maintenance such as oil changes, wheel alignments, and tire rotations constitute the bulk of a vehicle’s operating costs.

Over the next 30,000 to 50,000 miles, operating expenses increase as brakes and tires need to be replaced. From this point forward, costs continue trending upward throughout the life of a vehicle.

One also can’t ignore the softer aspects such as the unpleasant experience due to uncomfortable seats or any persistent odors. As such, fleet managers need to strategically prioritize vehicle lifecycles and replacement decisions to lower overall expenses.

A Few Methods Of Tracking Expenses

Fleet managers need to carefully track inspections. Drivers and mechanics should conduct routine checks and document them each time they are performed. This information can help plan better for future vehicle repairs.

Managers also need to keep a close eye on all the aspects of the purchasing process, including requisitions, purchase orders, work orders, and vendor maintenance. Ideally, fleet management software or a well-laid out spreadsheet can be of help in controlling the expenses.

They also need to monitor the movement of vehicles in real-time. Here asset tracking software supplemented with GPS can prove handy; it can ensure fleet movement as per the plan and prevent unneeded expenditure.

Conclusion

The role of fleet managers has become strategic since they play a vital role in containing costs, one of the topmost concerns of the top management. Fleet managers can save their companies a lot of money with the help of groundbreaking software and precise documentation.

Fleet managers need to follow a vehicle management plan and attend training and events relevant to their role to become more effective at their job and in the bargain save money for the organization. They also must preempt any untoward situations and make good use of past data to tackle problems effectively.