Finance leaders are increasingly expected to do more with less and investment in various technologies is being leveraged more and more to mitigate the gaps. For organisations with fleets of vehicles, tools and other mobile assets, effectively managing, controlling and often reducing fleet expenditure is a critical aspect of financial planning. Telematics systems have emerged as a cornerstone for unlocking direct financial benefits to teams and businesses across industries. How? At the forefront of this transformation is the holy grail of mobility data insights that can empower businesses to control expenses while maintaining optimum operational effectiveness.
The reality is, vehicle tracking software can better connect a business’ fleet to its finance teams, through more accurate use of data as well as sophisticated and automated reporting functionalities, resulting in more streamlined and efficient processes throughout the working year.
Fleet expenditure – a myriad of operational costs
Fleet expenditure encompasses the financial resources required to operate and maintain a fleet of vehicles or mobile assets effectively. This expense extends well beyond the initial purchase or leasing costs of these assets. Fleet Managers and Finance Directors must navigate ongoing fuel expenses, maintenance and repairs, insurance premiums, and even the safety, productivity and driving styles of those behind the wheel.
To put the financial scale at which fleets operate into perspective, Data Bridge Market Research, states that the UK fleet management market is expected to grow to a projected USD 1,402.94 million from 2022 to 2029. Careful and informed management of fleet expenditure will be even more key in the years ahead.
Key cost areas and solutions
Fleet expenditure, put bluntly, directly impacts an organisation’s financial health. Managed well, it will result in substantial cost savings, improved operational efficiency, and enhanced competitiveness. The following are some key areas of fleet expenses, but also opportunities for increased efficiency.
- Fuel Costs & Environmental Reporting
Fuel costs make up a significant portion of a fleet’s budget, especially for larger operations. Let’s not forget the environmental and sustainability concerns that go hand in hand with fuel consumption too.
GPS tracking systems provide real-time visibility of a fleet’s vehicle locations, enabling efficient route planning. By monitoring driver behavior too, including speeding and idling time, responsible driving habits are encouraged, minimising fuel consumption and fuel costs. All these elements can elevate sustainability credentials and fleet management software can ensure all is reported to the last detail – crucial at a time when companies are now expected to report accurately on their environmental impact.
- Maintenance & Repairs
Fleet vehicles require regular maintenance to prevent unexpected downtime and expensive repairs. As vehicles age and accumulate mileage, they depreciate. These costs are an essential factor that must be accounted for in any budget. The predictive maintenance features of fleet tracking software predict when maintenance is needed, reducing the risk of breakdowns, unexpected repair expenses and emergency maintenance.
A data-led maintenance program significantly enhances safety and financial efficiency to keep vehicles in optimal condition and can help make informed decisions about asset management, replacement, and retirement.
- Insurance Premiums & Driver Productivity
Insurance premiums can be a significant expense when it comes to fleet expenditure and securing cost-effective coverage can be an ongoing challenge. Fleet tracking software that includes driver behaviour monitoring ensures safer driving practices, which can lead to reduced insurance premiums.
Usage-based insurance can also provide personalised insurance profiles for every driver in a fleet to promote safer driving and accurate pricing. Safer driving habits typically result in lower premiums and higher driver productivity but also promote a culture of safety and wellbeing for both fleet drivers and fellow road users.
- Compliance & Safety
Not adhering to important compliance and regulatory standards to maintain a safe fleet can result in fines that can strain budgets, and unfortunate accidents that can mean costly insurance claims and repairs. Compliance with regulations can be streamlined through features like automatic mileage tracking and reporting to ensure safety regulations are being met, such as those related to driver working hours.
Fleet tracking systems can identify and record unsafe driving practices, such as hard braking or rapid turns. This information allows for early intervention, reducing the risk of accidents and potential liability. The software can also identify training opportunities for drivers – a valuable tool in enhancing safety and reducing the risk of accidents and subsequent costs.
5. Better Payroll Management
The larger the fleet, the harder it can be to manage. Fortunately, technology has made the task of managing employees’ time and reducing payroll costs easier to handle. Finance teams can better automate employee records and streamline payroll management with vehicle tracking software. Automating these actions helps ease administrative work and minimise errors. It’s also easier to calculate – and predict – payroll expenses when it’s clear exactly how far and for how long each vehicle was driven. Importantly too, it can identify drivers who are ‘padding their hours’ and making fraudulent expenses claims.
Finance Directors can use the goldmine of data that fleet management software provides to identify areas of overspending, drive efficiencies, and implement cost-saving measures. With accurate data on past expenses and trends, Finance Directors can also create more realistic budgets and forecasts for fleet-related expenses, aiding better financial planning and allocation of resources.
For financial professionals being pressured to ‘do more with less’, vehicle tracking software might be the solution they need now more than ever, to help streamline and automate operations and reporting.
Provided by ABAX, a fleet management solutions provider empowering fleet businesses to work smarter, so they can save time, resources, and money