Incidental charges – randomly-incurred , often unfixed costs , including car washes , parking charges , tolls and miscellaneous out-of-pocket expenses .
Define the cost drivers for each key measure .
What are the factors that influence depreciation , fuel and maintenance costs ? Can you control them ? Find out what influences the other costs that you want to measure and minimise .
Depreciation - robust strategies that maximize the resale value have a positive effect on reducing depreciation . Consider your replacement policy ; vehicle type / size , and level of equipment provided ; and regional economic and market factors that may impact resale conditions .
Keep track of vehicles with heavy use , reallocate them where feasible , and be aware of seasonal changes in resale values to get the best possible return .
Fuel costs – they can be controlled through careful selection of vehicles , management of purchased fuel , and using tools to prevent fraudulent fuel purchases .
The use of driver training and technologies such as telematics can also lead to significant savings as they will help to reduce idling and excessive driving speeds , and to eliminate unauthorised vehicle use .
Maintenance costs - consider routine inspections of vehicles in the fleet to ensure that body , glass or mechanical problems are resolved quickly before they lead to significant costs for repairs or loss of productivity through downtime . Be aware of the warranty coverage and examine all repair expenses for possible recovery guarantee .
Next , compare your measurements against two ( or more ) benchmarks :
1 ) Your overall budget - know at all times how your actual costs are comparing to your projections .
2 ) Divisional performance – drill down to how costs compare from year to year , from business unit to business unit and even down to individual drivers . Establish if cost items are stable or fluctuating , and take the right steps at the right time to influence the numbers .
Report on key information
Up to date , accurate information presented in an intuitive format will allow you to truly understand your costs , spot trends and ultimately exceed the expectations of your company .
It is important to find a reliable , efficient way of collating information from each department involved in either vehicle , driver or asset finance activities . Armed with your base data , the next step is to quickly and easily be able to blend and report on the results .
Spotting exceptions and identifying trends will help you to drill into excessive cost areas , and using technology as a framework will ensure nothing is hidden or overlooked .
Reports that provide KPIs will give stakeholders in the business a sound grasp on company performance , especially when looking at costs . Exception reporting can also help to detect theft , fraud or other illegal activities that may be occurring within the business .
Financial reports for the fleet should be produced regularly in order to help spot issues early , and they should be available to all managers with responsibility for vehicles and / or drivers . Safe driving and cost effective , compliant vehicle management are part of the company culture , and engagement from the whole organisation is crucial if you are to make positive , tangible changes .
Know the data sources available to you .
A great many areas of the business are connected to the fleet , and knowing where to find the optimum level of information is key to effective cost control .
Fleet related invoices are a crucial source of data ; giving you vehicle mileage , information about dealer terms / discounts , and of course those all -important advisory repair guidelines . HR routines such as timesheet reporting can give crucial insights into driver working hours and effective use of time . And fuel purchasing data is of course vitally important for uncovering avoidable costs .
Consider the best way of collating and storing the data streams - a robust fleet management system is unquestionably the most efficient means of capturing the right data and enabling you to quickly spot ( and resolve ) areas of excessive spend . Don ’ t forget to factor in the less visible but ongoing costs such as insurance – consult with others within the business to uncover every conceivable expense associated with the fleet . And consider ‘ shopping around ’… having a routine in place to periodically review and challenge your service providers can result in savings .
Finally , determine what will be the most effective method for you to capture mileage and odometer information , and implement controls to ensure that you get accurate readings . Vehicle mileage is not only a key factor in all your operating costs , but also has a direct impact on vehicle depreciation , which is arguably the most costly factor within your fleet . �
07