When it comes to maintaining an efficient fleet, budgeting is essential. As a fleet manager, you need to know your operating costs including fuel costs, maintenance costs, and your leasing prices. These will help you to make good decisions about how much money you can spend on vehicles and maintenance. Having an accurate budget will also help ensure that the company doesn’t overspend when purchasing new vehicles. Here are some tips to help you create a healthy fleet budget.
Keep Your Expenses in One Place
Too often, managers are using multiple accounts to manage expenses. Gathering all these expenses into one dashboard can be a game changer for your fleet finances. You can even leverage things like corporate credit cards and fuel cards. Corporate credit cards often allow you to manage expenses from multiple users in one area and can often be imported into bookkeeping software. Fuel cards are specialized cards that can only be used to purchase fuel. This ensures that your drivers aren’t accidentally putting personal expenses on a credit card and can help you better manage expenses.
Determine the Company’s Long-Term and Short-Term Goals
Before you set out to create a fleet budget, you need to identify your company’s long-term and short-term goals. Do you want to expand the fleet? How much money do you have to invest in future initiatives? What do these goals look like in terms of cost savings, efficiency, and performance? Your answers will help define what your fleet budget should be focused on achieving.
For example, if one of your company’s main goals is reducing fuel costs across the board, then it makes sense for this goal to be reflected in every aspect of your vehicle selection process. Not only that, but you’ll choose fuel cards that offer discounts and other perks that can help your company’s bottom line.
Don’t Forget to Include Maintenance Costs
Fleet costs will vary depending on whether you choose to include maintenance or repairs in your operating costs. Maintenance refers to regular upkeep of your vehicle—think oil changes, tire rotation, and replacement—while repairs are more serious issues like getting a new alternator. These costs should be accounted for in your budget so that you have the money set aside for them as they come up.
Include Vehicle Purchases in the Initial Planning Stages
If you have access to capital, it’s always a good idea to purchase new vehicles. If not, consider leasing them instead. Leasing is an excellent option and may offer more benefits. This means that you would need to include the monthly lease in your budget. This is a great strategy especially if you need to add multiple vehicles at once and you don’t want to blow through all your capital or saved business funds.
Update the Budget Regularly
After the initial plan has been created, it’s best to update the budget throughout the year to maintain accuracy. As market conditions change, your fleet budget may need to be adjusted. This might mean reallocating funds as business needs change, or even expanding your budget in one area as more income comes in. Or it might mean not doing a project like you planned because the funds didn’t arrive as you expected. Updating the numbers throughout the year gives you a clearer picture of where your fleet business stands and how you can continue to grow and expand.
Track Monthly Expenses and Identify How You Can Reduce Them
Use a budgeting solution that helps you look at all the costs associated with running a fleet business. Some of the company costs might include fuel, maintenance, labor, insurance, sales, marketing, and other expenses. You’ll be able to spot opportunities to boost your revenue, lower your expenses through automation, and see where you can consolidate costs when you track these numbers effectively.
Business goals change all the time. This means that your budget should also change to go with it. Vehicle use will fluctuate each year for example. So, this means that if you have more vehicles in service than normal during high-demand seasons, you’ll need more in the budget for fuel and maintenance. If you have fewer vehicles due to low demand, you can funnel those funds into other areas.