Fuel cards and the benefit of using them for your fleet
Using fuel cards for your expenses on the road, and more precisely for fueling, toll taxes and other road services, is not something innovative in the industry, but there are still transport companies that pay their expenses in cash. As a consulting company, Truckpoint strongly recommends to all truckers with whom we work and still do not use this payment method to take the necessary steps and equip their fleet with fuel cards. Below we list the great range of benefits that will help your transport company to be more organized and reduce operational costs significantly, and we hope to stimulate you getting another beneficial solution for your company.
Nowadays, there is a huge range of options you can choose from, but we will only mention and look at the largest and most common solutions on the market. In order to choose the best option for you, it is extremely important to take a closer look at your business and have a good analysis of your traffic that makes up the most of your trips. There are both local and international solutions that, depending on the specifics of your business, may be the most appropriate solution, but we will stay out of this thesis for now. Fuel cards give several key benefits to carriers – easier transaction reporting; access to a wide range of gas stations; the payment of additional services and especially tolls; simplified refund of VAT and Excise duty; reducing administrative and operational difficulties to provide drivers with cash; and many others, but we will focus on these fundamental functionalities.
Easier reporting of transactions
It is important to mention that, depending on the size of the fleet, as well as the preferred vehicles (truck, solo trucks, etc.), the cost per unit of your fleet amounts to thousands of euro and the number of transactions is dozens if not hundreds in case your fleet travels internationally. In many cases, fuels, road taxes and other services amount to 40-60% of the total cost of a transport unit, which requires the utmost importance to accurately tracking and optimizing these type of costs. Each of the major international fueling companies offers this option, which may be critical to keeping your business profitable.
Access to a wide range of petrol stations
As a carrier, you have options to focus your business on a national, local or international level. Many transport companies travel internationally, and in many cases a truck cross over 10 countries a month, which requires quality gas stations that you can rely on for their refueling. The frequency for refueling varies greatly but in most cases even at local courses it is necessary to refuel on the road back to the headquarter or the new pick-up address. Also, access to a wide range of stations reduces the risk of your fleet travelling unnecessary kilometers to reach the exact point of refueling. Non-paid kilometers are one of the biggest obstacles for carriers and certainly no one should be intentionally adding non-paid mileage.
Simplified refund of VAT and Excise duty
Let’s start by saying that in most cases, in the absence of an invoice indicating your company’s details, the refund of VAT and Excise is almost impossible. Using a fuel card to pay your fuels, tolls, etc. is resolving this issue as the fuel operator registers you to the relevant operators and provides invoice with VAT details on it. Most fuel operators provide an easy option to refund VAT and Excise duty through a partner agent or internally organized procedure. VAT in individual countries varies between 17% and 27%. You can also refund the accumulated excise duty upon meeting certain criteria in 8 European countries – Hungary, Spain, Italy, Romania, France, Portugal, Belgium, Slovenia. The excise duty per liter that your company can refund from using cards is from a few cents in Romania, Spain, Slovenia to between 14 and 25 cents in Italy, France, Hungary, Portugal, Belgium (for more accurate information, contact our consultants to help you get specific rates at the time of your inquiry).
Cash for truck drivers
Maintaining persistent cash holdings in truck drivers is associated with many administrative and operational difficulties. Reporting is in a much more cumbersome way, and currency exchange can cost you a lot of time and money. There are a number of reported cases of theft in Europe, and the mere presence of larger amounts in cash always carries its risks. A single hit on your driver can cost you thousands of euros in a particular month, and you can register a zero month for your company’s profit. Also, the non-cash payment of road tolls takes much less time than cash. Having in mind that time can be a key factor, both for meeting delivery time and for accumulating more kilometers, which subsequently increases the turnover of transport unit in a particular month.
Leading companies offering fuel cards and tolls
Shell; DKV; AS24; euroWAG; UTA; Routex (OMV, BP, ARAL); IDS. Of the listed companies, all without IDS offer tolls and other services. Shell has the largest branded network of gas stations, which gives a great advantage for imposing strict control over the quality of the fuels. DKV, on their part, do not have their own gas stations, but have developed a large network of partners and have probably the most complex solution on the market. IDS have their own non-staffed facilities specifically tailored for heavy traffic but do not offer a toll option, which necessarily requires a second fuel supplier. Truckpoint recommends the use of a minimum number of fuel cards, as on the contrary it leads to excessive risks for your transactions.
Only a part of the benefits of using fuel cards were listed above. There are a number of other benefits that provide cost optimization options or facilitation of processes themselves. In short, the use of fuel cards is almost imperative if you want to maintain competitiveness and relieve drivers of the hassle for paying cash of various road services.