Top Reasons Why Businesses Must Switch to Fuel Cards

Companies that heavily depend on their fleet for daily operations have three important needs - a payment method for fuel purchases, reliable fuel expense tracking, and comprehensive data reporting. When it comes to paying for fuel, three options are readily used today, cash, credit cards, and fuel cards. Among them, fuel cards for businesses also make fuel expense tracking and reporting easier, making them a suitable choice for any company that has to maintain a large fleet. 

What is a Fuel Card?

A fuel card is an alternative payment method for purchasing fuel and allows you to efficiently track fuel spend, limit usage, and file expenses. These cards are specifically designed to help businesses seamlessly manage the fuel costs of their fleet. Regardless of how many vehicles you have in your fleet, using fuel cards can prove to be pretty advantageous. These cards can even be used through a smartphone app today. 

Fuel cards are used exclusively for fuel purchases. Businesses may allocate fuel cards to fleet drivers for work and even employees who have to take business trips too often. Fuel is often among the most complex and costly expenses for companies in the transportation or logistics business. Choosing to transition from a reimbursement model to using dedicated cards for fuel purchases can help save these companies a good amount of time and money.  Today, it is easy to apply for fuel cards online.

Credit-Based Fuel Cards

Today, multiple types of fuel cards are available in the market. Each of them has distinctive features and follows a specific payment model. Among these options, credit-based fuel cards for businesses have especially gained considerable popularity over the last couple of years as they use a line of credit to complete purchases. The company is billed for the total amount of money that has been spent on the card at the end of the month or so. Many fuel cards also allow businesses to enjoy a credit period of up to 45 days and charge a nominal interest thereafter. Interest on fuel cards is usually calculated based on the day-end balance or the daily utilization of the facility. Through them, fleet drivers can purchase fuel from any HPCL and IOCL outlet across the country.

Managing Fuel Expenses 

Managing fuel expenses is among the most tedious yet important responsibilities of many fuel managers. If your fleet drivers use cash for buying fuel, they would have to go through a taxing process of collecting fuel receipts from drivers, checking and verifying them, canceling private expenses, and determining the actual reimbursement amount. The company has to subsequently reimburse the costs to the drivers. This process can be very complex and time-consuming. Compiling and checking large stacks of fuel receipts takes a lot of time. Things can get even more complex in case a driver misplaces their receipts. Moreover, trying to analyze fuel costs, mileage, and consumption through individual receipts would require a high degree of manual effort. 

As you apply for a fuel card online, your business can gain access to a payment tool that functions quite like a credit card. The driver can fill up fuel at any of the pumps coming under the network of the fuel card, and its invoice shall directly go to the company. This would ultimately lower the bureaucratic efforts of fleet managers and companies. Not only do fuel cards make refueling simpler and more convenient for fleet drivers, but they also provide fleet managers with superior transparency when it comes to managing fuel cards through automatic invoicing, integration, and reporting.

Gaining Superior Control Over Business Spends

A fuel card can provide you with complete control over the fuel spending made by your fleet drivers. As it restricts purchases to only fuel, you can be assured that your company funds are being used appropriately. Unlike cash or credit cards that can be used for buying almost any product, fuel cards are solely meant for fuel purchases. 

Increased Security

Fuel cards help in lowering the risk of fuel fraud. Companies that use cash or credit cards as a payment method for fuel purchases can be at risk of being victims of fuel fraud. However, as your business starts using a fuel card, details of any fuel purchases made through the card will be stored online. You shall have access to all the transaction receipts and therefore, can swiftly check how much each driver is spending on fuel and spot any irregularities. The payment process at the pump is also highly secured and OTP-backed. Without the OTP, no transaction can be made through the card. Hence, you do not have to worry about payments made through it, in case the card gets lost or stolen. 

Cost Savings 

One of the prime benefits of fuel cards is the cost savings they provide. Many popular fuel cards for business come with valuable cashback and rewards. The cashback amount is credited to the fuel card account in the form of reward points and can be redeemed for the next purchase of fuel and lubricants. While the cashback amount may not seem too high at the beginning, it can eventually result in cost savings, especially for businesses with a large fleet. 

Wrapping up

Diverse types of fuel card benefits impact businesses in varied ways, starting from lowering fuel expenses to making it easier to manage such costs. Fuel cards are largely characterized by the convenience and savings they provide. By switching to such cards, your team can effectively avoid the time-consuming process of reimbursing the drivers and employees for the money they have spent on fuel. Many fuel cards today are also equipped with features that allow them to track fuel transactions, control budgets, and monitor the amount of money that has been spent on fuel purchases. Overall, fuel cards for business can provide you with greater spending control along with the ability to see exactly where your fuel budget is being spent.