A fuel card – also known as a fleet card – is a payment card that is usually used in paying for diesel, gasoline along with other fuels at gas stations. A Fuel card can also be used to pay for the maintenance of vehicles and other expenses if it is allowed by the fleet manager or owner.
A Fuel card is special because of its convenience and the detailed reporting that is involved in its usage. Fuel card allows fleet managers or owners to receive reports in real time as well as put in place purchase controls with their cards making it possible for them to be informed of all expenses associated to the business.
DIFFERENCES BETWEEN FUEL CARDS AND CREDIT CARDS
Though fuel cards really look like credit cards and use technology that is very similar, their implementation and usage is quite different which provides enough reasons to view them as an alternative method of payment. Fuel cards are different from credit in the following ways:
Most times terms of payment get shorter.
Every month no rolling balance is cleared.
Transactions can be customized allowing only particular types of fuel such as petrol and gas oil, petrol, petrol and diesel and much more.
Terminals of payment are separate from those used for debit or credit cards.
Technically fuel is not paid at sale point, it is just allocated on account for payment at future date.
Based on the agreement with the card provider, the user of the card is liable for any fraudulent transaction.
FUEL CARDS USAGE IN BUSINESSES
Basically, most of the businesses making use of fuel cards are those that rely heavily on motor vehicles on a daily basis for transportation, courier services, haulage and lots more.
A major reason a business will use fuel card is to help them achieve substantial savings both on administrative costs and present price of fuel. Normally a business will collect an invoice every week which is paid by direct debit and this replaces reconciliation of paper receipts manually which could be a lot every week especially for huge organizations.
Also fuel cards improve the management and security regarding fuel purchases. These benefits attracts several businesses – especially those that operate large fleets which can sometimes involve thousands of vehicles.
ADVANTAGES OF FUEL CARDS TO YOUR BUSINESS INVOICING
Fleet managers and owners do not need to look through large paperwork of receipts and expenses to determine the amount of reimbursement that is needed as fuel costs are immediately known through invoices.
Fleet managers will get a report at the end of the month that can be used to monitor and know the driver that is buying the most fuel and at what price and the service station they are supplying and how frequently it is done.
NO NEED FOR CASH
No need for drivers to move with cash to buy fuel which is safe and helps in easy calculation of claims.
Using fuel card is convenient and gives you greater control of the business and helps to reduce cases of fraud.