Author: Simon Pavey

When costs rise, the businesses that are hardest hit are always those at the smaller end of the scale. SMEs, with fewer cash reserves to fall back on in times of need, are more vulnerable to fluctuations in the market – and must take all reasonable steps to protect their profitability.

For many small businesses, fuel is one of the most (if not the most) significant operating costs to contend with. So, it’s no surprise that the sky-high prices we have seen for petrol and diesel over the past year have put many fleet managers on edge. That’s why having a robust financial strategy is crucial to success, and factoring in supply chain disruptions, staff shortages, and fuel prices, is crucial for SME fleets.

For fleet managers looking to get ahead of the curve and implement an effective cash flow management strategy, the place to start is with comprehensive cashflow forecasting, both for the short and long term.

What is a cash flow forecast?

For fleet managers, a cash flow forecast is a simple excel document that maps out expected costs and revenues over time. Alternatively, cash flow forecasting software is available in market from external providers, however the essence of the forecast is the same; documenting all of fleet’s outgoings over a specific time.

The period of time you might choose to forecast for will depend on your circumstances and there can be many benefits to performing forecasting for both the long and short term.

During the lockdowns of 2020 and 2021, many business made the switch to short term forecasting as the landscape was changing so rapidly that any longer term predictions were highly unreliable. This same attitude can be taken if the focus of your cash flow forecasting is navigating the ongoing fuel market fluctuations.

Are fuel prices going to rise?

While prices have seen a gradual decline from their peak in July 2022, they remain high compared to pre-pandemic prices and are predicted to rise again later this year.

In recent news, Saudi Arabia, Iraq and several Gulf states announce their plans to cut output of crude oil by as much as 1 million barrels per day which will undoubtedly increase pressure on the fuel supply globally.

Creating a cash flow forecast that works for your fleet

Fleet cash flow forecasting will look different for every business, but there are three main considerations that you can shape your forecasting around:

1. Decide on your forecasting period

Gauging the scale of the role fuel plays in your fleet, then reconciling this with the current volatility of fuel prices in the current market should enable you to make a reasonable judgement around what an appropriate forecasting window could look like for your business.

For example, implementing a daily or weekly forecast could help you react quickly to any changes in market, however it may be quite resource intensive for small teams. Conversely, a more traditional monthly or quarterly forecast could give you a rough understanding of your predicted revenues, while enabling you to focus more on day-to-day tasks – and this may be appropriate for businesses that aren’t too dependent on the stability of specific overheads.

2. Estimate your fleet expenses and outgoings

This will include your fleet’s average mileage, maintenance, and servicing costs as well as the cost of any telematics services or programme subscriptions you use for fleet management. It’s crucial to use historical data as much as possible to keep these predictions realistic.

Beyond identifying all of your business’ costs, it’s worth factoring in your plan to reduce each of these costs – whether that involves renegotiating deals with suppliers, or looking for innovative products in market to reduce individual costs.

One strategy that could be useful in a longer term cash flow forecast is to practice pessimism; factoring for the worst case scenario in terms of fuel prices to help ensure that your revenues are protected.

3. Look at the fuel trends

While the crude oil market remains at times unpredictable, looking at the patterns in recent months and expert insight looking forward can help you to get an idea of when price increases could be expected and what sort of increases we might see.

Whilst you might not be able to forecast with a high level of certainty, rough estimates and a certain amount of tactical pessimism will help you to predict which periods of the year might require stricter cost management.

With this information, you can then consider in more detail what your costs might look like on a monthly/quarterly basis and how this will affect the profitability of your fleet operations. Adjusting operations and expenditure to balance costs in more expensive months is then easier to manage and less of a shock to cash flow.

Slash costs from day one

The information gathered from cashflow forecasting can help fleet managers of small fleets set up outgoings in such a way that the impact of fluctuations in the fuel market are dampened, setting businesses up to better weather the storm.

For measures that fleet managers can put in place as a foundational tool whatever the market outlook, there are a range of great tools that can help to streamline fleet management, cut administrative costs, and effectively monitor fleets to identify areas where consumption and safety can be improved.

At Fuel Card Services, we provide a range of fleet software and telematics including Tele-Gence, My Transport Planner, MyService.Expert and more. With the right combination of tools and a fuel card designed for small fleets, you can cut costs across the year, putting you in an even better position to handle anything the crude oil market throws your fleet’s direction.

Get in touch today to discuss our fleet management tools and the variety of fuel cards and charge cards available for SMEs.

Procurement looks different for every business, and for fleets it means the acquisition of vehicles and all the other services and parts required for the appropriate, safe, and legal operation of a fleet. Fleet procurement is the groundwork of a strong fleet, and it can be hard to know how to strategise to ensure an effective fleet procurement process.

Essential considerations in fleet procurement

Before diving in and picking up the keys for fleet vehicles, fleet managers should take the time to thoroughly consider all aspects of the fleet procurement process and have a detailed plan of what the fleet needs, from the vehicle to its maintenance and running costs post-acquisition.

What is the purpose of the fleet vehicles?

The first and most obvious thing to consider is what exactly you are procuring fleet vehicles for. It’s important that you understand the role that the vehicle/s will play in your business, for example are they company cars for staff travel, or are you acquiring fleet vehicles for last mile delivery purposes?

Another important thing to consider is how essential the fleet vehicles you will be procuring will be for your business. With the economic landscape businesses are operating regularly in a state of flux, so it is wise to consider whether fleet vehicles are the best investment for your business at this time.

What type of vehicle engine do you want/need?

Considering the type of journeys your fleet vehicles will be doing will make it easier to know what type of vehicle engine you want to choose.

Petrol vehicles are better for fleets taking more short journeys at lower speeds, making them a good choice for urban driving. Diesel is better suited to longer journeys though this fuel is more expensive. Hybrid and electric vehicles are more sustainable options and come with more tax savings though they might require infrastructure installation and offer lower mileage potential than combustion vehicles.

Common routes

Understanding the routes your fleet vehicles will be frequently traversing will guide your decision about what type of vehicle/s will be beneficial choices and what features would be useful too. Consider the types of roads, the common speed limits, access to garages and gas stations, whether the routes are rural or city-based, as these things will help you decide on the aforementioned engine types as well as other important features for the vehicles you procure.

Route planning is also essential to the efficiency of your fleet, so why not consider applying a route planning and optimising tool like My Transport Planner? This piece of pay-as-you-go software helps to organise fleet routes and ensure they are the most efficient routes available, helping to save on time, money and fuel.

Maximising fuel economy

For fleet procurement, fuel economy is one of the biggest factors that will determine the cost effectiveness of your fleet vehicles. Cutting costs is a priority for fleet managers, and keeping fuel economy in mind during fleet procurement is vital to cutting costs and increasing sustainability.

The fuel efficiency of different vehicle models is a great starting point when you begin consider what vehicles you might want to add to your fleet. Newer vehicles are more likely to benefit from features that increase fuel economy and efficient driving such as cruise control.

Driver tracking

While the vehicles that make up your fleet have a significant role to play in fuel economy, so do the individuals behind the wheel. Monitoring driver behaviour helps you to identify areas of improvement and where efficiency can be increased, as well as being a great tool to ensure safe operation of your fleet at all times. Consider what telematics and tracking services you might find beneficial to help increase fuel economy as well as driver safety as part of your fleet procurement plan.

Organising and managing maintenance and servicing

For fleet procurement, considering the upkeep of the vehicles you intend to add to your fleet is important for safety, legality and keeping costs down. It’s important that upkeep of your fleet vehicles is affordable and practical, and one way to help ensure this is with fleet tools like MyService.Expert, MyDriveSafe and Fleet Check.

These pieces of software can help you to organise servicing and maintenance schedules and bookings, can support safety checks and help with the general management of your fleet vehicles. Not only can they help save you time and money by increasing the efficiency of these processes but tools like MyService.Expert offer access to great rates to help further cut costs.

Funding and Taxing

Choosing how to fund your fleet procurement is a big part of your procurement strategy and will depend on your company size and finances as well as the type of fleet you are growing. Whether you are leaning more towards purchasing or leasing your fleet vehicles you can read more about these two options in our financial management guide for fleet operators.

Taxing your fleet vehicles is also important to ensure your fleet operates legally. If you aren’t familiar with company vehicle tax and fleet vehicle taxation you can read more in our company car tax guide. There are savings to be made when taxing electric vehicles which you can learn more about in our EV tax guide too.

Savings for your fleet with Fuel Card Services

With a thorough procurement strategy and having considered all necessary factors discussed here you can build a fleet that is curated to serve your business perfectly, and in the most cost effective manner possible.

Putting to use fleet software can help you to ensure the fleet you build runs smoothly and can help you to continue to save money and time, and the right fuel card or charge card can help you fuel your fleet and manage the admin with minimal hassle. Get in touch with our experts to learn more about the tools we offer to streamline your fleet management.

From the end of March 2023, a number of sites will be leaving the BP network across the UK. However, a handful of new BP sites are also set to open in the following weeks. Read on to find out more!

Which BP sites will be closing?

The following BP site closures will take place on March 31st 2023:

• Bedworth South | A444 Bedworth bypass, Nuneaton, Warwickshire CV10 7DA
• Casterton Hill | Great Casterton, Stamford, Lincolnshire, PE9 4DE
• Cromwell | Great North Road, Newark, Nottinghamshire, NG23 6JE
• Darrington | A1 Southbound, Pontefact, West Yorkshire, WF8 3HU
• Hopwood Park | Redditch Road, Birmingham, West Midlands, B48 7AU
• Lower Early | Chalfont Way, Reading, Berkshire, RG6 5HJ
• West Park Street | 22 West Park Street, Chatteris, Cambridgeshire, PE16 6AJ
• Kates Cabin | Great North Road, Peterborough, Cambridgeshire, PE7 3UD
• Muskham | North Road, Newark, Nottinghamshire, NG23 6HT
• Wyboston | A1 Southbound, Bedford, Bedfordshire, MK44 3AA
• Three Counties | Warrington Roundabout, Olney, Buckinghamshire, MK46 4JQ

If your preferred BP site is going to be affected by these closures, be sure to use our pump locator app to find your nearest alternative.

What BP sites will be opening?

The following BP bunker sites will be opening in the weeks following the above closures:

• Wittering | A1 Great North Road, Wittering, Cambridgeshire, PE8 6HA | Opening April 4th 2023
• Bloody Oaks | Great North Road, Tickencote, Lincolnshire, PE9 4AD | Opening April 11th 2023
• Vale | Cheltenham Road, Evesham, Worcestershire, WR11 7QP | Opening April 12th 2023
• Prizet South | A591 Helsington, Kendal, Cumbria, LA8 8AA | Opening date TBC

Finally, the following non-bunker site is also set to open on April 3rd 2023:

• Filleybrook | Newcastle Road, Stone, Staffordshire, ST15 0PT

Keep your fleet moving with a BP fuel card

Whatever the size of your business, we’ve got the perfect BP fuel card for you. With variable pricing options to meet your needs, access to an extensive nationwide network, and quality fuels, our team of fuel card experts can find a fuel card that’s right for you.

Get in touch today to find out more!

Leasing or buying a car for business use can be a great option with many benefits, but the list of things to consider can seem long and complicated. Ultimately, a company car has the potential to be a useful tool for both employer and employee, but there are some crucial assessments fleet operators and managers should look to make before deciding how company cars are acquired and distributed.

What is a company car?

A company car is a vehicle owned or leased by a business and used by an employee for business use, and possibly also personal travel. For a company car to be justified, the employee is likely to be required to drive a notable amount for the role, or alternatively it might be offered as a perk or part of company branding.

Things to consider for company car buying and leasing

If you are offering your employees company cars, whether for the sake of practicality or as a useful workplace perk, there are important things to consider. Different factors will guide the choices you make through the process of company car acquisition, including the following.

1. Decide whether you are buying or leasing

The first thing you need to decide is whether you will be purchasing the company vehicles or leasing them. This decision will be guided by your business’ financial situation as well as other considerations such as business size and the nature of the work.

• Leasing a company car can be beneficial because it can eliminate any upfront costs, offer affordable payment schemes that only apply to a period of usage, and can avoid the expenses related to ageing vehicles.
• Buying a company car, on the other hand, offers the potential benefits of having no ongoing payment when bought outright, no mileage limit, and the freedom to sell the vehicle at any time.

Each means of acquiring company cars has its benefits and drawbacks. The decision about which is the best fit for your business should be carefully considered to ensure you have the right set up for your fleet and business finances – and having a serious conversion with your senior management team about whether your vehicle portfolio is fit for purpose could be a good starting point for the 2023-24 financial year.

2. Consider the usage of your company cars

Understanding what type of use your company cars are going to get is vital to gauging whether investing in company cars is a good idea for your business in the long-term. It’s also key to determining the type of insurance you will need on the company cars you acquire – which is an important operational cost to consider.

For SMEs considering company cars for the benefit of work-based commuting, visits, and deliveries, company cars can seem like an big investment – but the payoff of being able to claim a vehicle as a company expense could bring about serious savings moving forward.

3. Choosing the right company cars for your fleet

Deciding what type of car/s to purchase or lease is a huge part of the company car acquisition process. There are many factors to consider when ensuring that your fleet portfolio matches the everyday needs of your business, including:

• Petrol, diesel, hybrid, or EV models.
• Budgets.
• Emissions and tax.
• Safety and comfort features.
• Mileage and efficiency.

Whether you are acquiring cars for your business or are compiling a list of company approved cars for your employees to choose from, it’s important you know which vehicles are appropriate and capable of fulfilling journeys effectively. Here are some noteworthy distinctions to help you decide on the future of your fleet.

Electric company cars

Choosing the type of vehicles is a pivotal moment for a business, particularly if you choose to begin building an electric fleet. Making the move to electric vehicles is a great idea, both for cutting down emissions and for building up a reputation as a forward thinking and environmentally considerate business, something that will pay off moving into a more sustainably focused future. However, if you are deciding to bring electric cars onboard, you will need to be prepared to accommodate them with the necessary infrastructure to support them.

Purchasing used cars

If you are looking to purchase used vehicles for your company cars, there are savings to be made but also important things to consider. If this is the route you decide to take when acquiring your company cars, ensure that any cars you are considering have been checked by a reputable mechanic. Also consider the aforementioned factors, namely the emissions and engine type of the vehicle, to ensure that you are getting the best vehicle for your needs and money.

4. Fuel economy as a priority

If you are looking to cut the tax payments wherever possible, then opting for low and zero emission vehicles can help keep the money in the bank. The current tax system means that the higher the amount of emissions a vehicle produces, the higher the vehicle exercise duty (VED) you will need to pay. This means that it pays to opt for less polluting vehicles, such as hybrid and electric vehicles.

You can also currently claim 100% first year allowances on newly purchase electric cars as well as charging point equipment.

Reputation is an important consideration for many business ventures, and your company car fleet is no different. Not only are electric and hybrid vehicles better for the environment, but demonstrating to your clients and customers that you are invested in sustainability could pay off when it comes to brand reputation and environmental credentials.

To improve your fleet’s fuel economy, a route optimisation tool like My Transport Planner can help you to make your route planning and fuel consumption as efficient as possible.

 

 

5. Create a long-term cashflow forecast

As with any investment, it’s important to consider all the costs involved in real terms. For example, consider loans required to purchase vehicles and the interest you will be paying on them, how much money will need to be spent on maintenance and fuel costs, and any associated costs if you lease the vehicles.

Comparing this data with the usage of the vehicle and the benefit it will serve the business will give you a clearer understanding of whether it is a worthwhile business endeavour. This practise will also mean you can anticipate any costs ahead of time, which could put you in a better position to handle any cash-flow complications should they arise.

For the management of maintenance and servicing costs, software tools like MyService.Expert can help you to manage maintenance schedules and unlock a range of pre-negotiated competitive rates to help you save money on admin, maintenance, servicing and repairs.

6. Ensure your employees understand their relationship with their company car

From the difference between a company car and a car allowance to whom the tax responsibility falls upon, its important your employees understand the arrangement and their responsibilities.

A company car is a car that is leased or owned by the company that the employee can use for both work and personal travel if agreed upon. On the other hand, car allowance is a sum of money that is added to an employee’s wage to assist them with the purchase or leasing of a car in their own name.

For some companies, car allowance might be a more suitable choice as it reduces the amount of costs the company is responsible for, however there is still a legal responsibility on the company to ensure the car is ensured and MOT tested.

Company cars are a benefit in kind, and as such have different tax responsibilities for the employer and employee. You can learn more about this in our company car tax guide.

It’s important you and your employee are on the same page about the car agreement you are using and what the tax expectations are, as well as who holds responsibility for the vehicle’s maintenance and servicing.

7. Invest in telematics and other management programmes

The right combination of telematics and other fleet management software can ensure that whatever your choice of company cars and however many vehicles you add to your fleet, your fleet is operating safely and efficiently.

Telematics like Tele-Gence offer flexible and customisable fleet tracking to help you ensure that your drivers are operating safely, track vehicle location, record journeys and more. Telematics can be integrated with cameras and asset trackers to create a fleet management system that keeps you in control of your company cars.

There’s a great range of other fleet management tech that can help you to keep on top of important tasks like the servicing and maintenance of your company vehicles, and prioritise driver safety. You can browse our range of fleet management tools and software here.

Fuelling your company car fleet with Fuel Card Services

Acquisition of your fleet of company cars can be a complex process with much to consider. Once you have built your fleet, make sure you keep refuelling it simple and cost-effective. Fuel Card Services offer a range of fuel cards and EV charge cards designed to make the administration of refuelling your fleet simple and keep costs low.

With many benefits you can tap into, get in touch today to learn more about which fuel card or charge card is right for your fleet.