Whether you run a business or you’re a sole trader, it can be hard to keep track of fuel costs if you’re on the road a lot. Providing an alternative to cash and credit cards, fuel cards can help businesses manage fuel costs, while also making it easier for business owners to track and report fuel and service spending.
But that’s not all. Fuel cards can also offer a range of additional benefits, such as discounts on fuel and exclusive offers from program partners. Some fuel cards even earn rewards points, which can be stacked up and redeemed within well-known programs such as Qantas Frequent Flyer.
Fuel Card Benefits
What are the benefits of getting a fuel card? Let’s take a closer look.
☛ Track Fuel Spending
Instead of relying on your employees to pay for fuel with cash and then provide you with a receipt, you can easily keep track of all fuel spending, with each purchase logged on your fuel card account.
This not only makes the task of tracking fuel spending easier, you can also monitor how much employees are spending and where, allowing you to follow up on discrepancies more efficiently.
☛ Reduce Expenses
With all the information you need compiled within one report, you will no longer need to go through piles of receipts at the end of each month to work how much each employee will need in recompense. This should save you on administrative expenses.
☛ Save on Fuel
Fuel cards not only allow businesses to save on administrative costs – they can also provide direct savings at the pumps. Depending on the fuel card you choose, you could enjoy a discount each time one of your employees fills up, to perhaps enjoy volume based pricing after a certain period of time.
☛ Save on Servicing
Some fuel cards allow users to pay for servicing, maintenance and repairs through partner networks. Doing this can again make tracking vehicle related spending easier for the business, while also providing discounted pricing and offers from partners within the program.
☛ Earn Rewards
Some fuel cards provide users the opportunity to earn rewards. As an example, the BP Plus fuel card allows users to earn Qantas Points on fuel and service station spending.
☛ Less Hassle
For employees out on the road, all they need to do is swipe their fuel card to pay when they fill up at the pumps. For business owners, there is no need to collect receipts or reimburse employees to cover out-of-pocket costs.
☛ Less Opportunity for Fraud
While fuel card reporting can make it easier for business owners to track fuel costs and root out fraudulent spending among employees, fuel cards can provide a safer way to pay in other ways too. For example, fuel cards can be set with a PIN, which only the cardholder knows. Some cards may also require number plate and odometer readings when filling up.
☛ Less Stress at Tax Time
Paying by cash and keeping receipts for fuel spending can be a nightmare to deal with come tax time. Even with a business credit card, it can take time to separate out the different types of spending on the card to accurately complete your return. With a fuel card, however, fuel and service spending is kept completely separate, simplifying tax reporting.
☛ Detailed Reports
Using the information provided within your detailed report, you can to dig deeper into the details, looking at everything from the cost per kilometre for each employee, to their fuel economy. This should allow you to analyse your fleet more efficiently, to then make more educated decisions regarding travel and transport within your business.
Fuel Card or Credit Card?
Weighing up your options? If you’re wondering whether you really need a fuel card, or whether a business credit card would do the job just as well, check out these important points.
- With a business credit card, you can provide each of your employees with access to credit, as needed.
- Primary accountholders can track spending for each cardholder, setting limits on or prohibiting certain types of spending. Individual credit limits can also be applied.
- A business credit card can be used in person and online, within Australia and overseas, anywhere Visa, Mastercard or American Express is accepted.
- Employees only need to carry one card, which can be used to cover all business expenses.
- Annual fees and other business credit card costs may be tax deductible.
- Business credit cards can earn rewards, which can be redeemed by the accountholder or as incentives for employees.
- Business credit cards can also offer additional features, such as travel insurance and airport lounge access.
- Depending on the type of card, a business card may act as a charge card or credit card. Charge cards and credit cards typically offer an interest free period that can assist with business cash flow.
- Most business cards offer expense reporting and easy data exporting to accounting software.
- Fuel cards can only be used to cover spending as specified by the type of card and the account. This may include fuel spending, service station spending, or servicing costs, within a limited range of service stations, service providers and retailers.
- Depending on the type of card, fuel card users may benefit from discounts at the pumps.
- Fuel cards may offer better spending controls than business cards.
- Reporting data allows for easy spend tracking on each employee, while also providing detailed data that could be used to make better business decisions.
- Keeping fuel and other vehicle costs separate, fuel cards can make expense reporting easier.
- Some fuel cards provide the opportunity to earn rewards.
How to Compare Fuel Cards
Think your business could benefit from a fuel card? Here are some factors to think about as you compare your options.
💡 Service Station Coverage
Think about how you and your employees will use the card. If you tend to only fill up at a specific service station chain, you could opt for a single-branded fuel card for that chain. If your travel requirements are much broader and more random, a multi-branded fuel card may be a better option.
While some fuel cards provide a specific discount on fuel costs, other cards vary the discount according to the business in question. The more fuel you buy, the more attractive your business is to the fuel card provider, which should translate to bigger discounts at the pumps. You may find that negotiating can get you a better rate, especially if you think your fuel purchasing volumes will grow.
Find out what limits you can place on individual cardholder spending, with regards to both spending amounts and types of spending. A card that allows for customisation in this way could help you save money, by deterring employees who would otherwise abuse their fuel expense accounts.
Check what security features each fuel card offers. Look for a card that allows cardholders to set a PIN. Other security features to look out for include rego plate and odometer reading when filling up.
Fuel cards may charge an ongoing monthly fee for use. This may be a set fee that is charged per card, or it may be determined by the type of account and volume of fuel purchased. Obviously, you want to make sure the fees you pay to use the fuel card are outweighed by the discounts and other benefits you get in return.
💡 Volume of your Fleet
Some fuel cards are better suited to sole traders and small to medium sized businesses, while others are designed to suit larger companies with much larger fleets. When taking this into account, look at the cost per card, which can add up on larger fleets and businesses that employ a high number of part-time workers.
💡 Interest Free Periods
With a fuel card, you will often benefit from an interest free period on your transactions – much like a credit card – which can allow you to manage your cash flow more efficiently. These interest free periods can range from 14 to 51 days, so it’s worth checking what each card offers before you apply.
If you want to earn rewards on your fuel card spending, check out fuel cards earning rewards. Take into account earn rate, points caps, and other important info, just as you would when comparing rewards credit cards.
💡 Intro Offers
Some fuel cards provide intro offers to entice new cardholders to sign up. Depending on the offer, this may allow the cardholder to enjoy a bigger discount on fuel costs over an introductory period, or take home a chunk of bonus rewards points. Bear in mind, terms may apply, such as a minimum fuel volume requirement.