Maintaining a fleet is already a complex task, and when you throw fleet cost management into the mix, it becomes even more rigorous. If fleet costs are not managed correctly, it could potentially negatively impact profitability.
The biggest mistake that occurs with fleet management costs is calculating them manually. Fluctuating prices and data can become confusing, and you could miss important information. Manual managing of fleet costs also takes away a manager’s time, which is vital in this business. That’s why many fleet businesses are turning to fleet management software that will efficiently track the cost of ownership and help keep costs down, like Rideshur.
But that’s not all that can be done to help with costs. Here are some other great tips to help improve your fleet cost management plan.
Figure Out Total Cost of Ownership (TCO)
What is considered the most challenging aspect in fleet cost management is calculating your fleet’s total cost of ownership. By understanding your fleet’s TCO, you can make data-driven decisions to manage your fleet better.
Fleet costs are broken up into fixed and variable costs.
Fixed Costs:
- License and permits
- Taxes
- Loans
- Lease payments
- Depreciation
Variable Costs:
- Fuel
- Maintenance
- Tolls
- Part replacement
Fleet management software lets you keep track and create custom reports to determine your total spending and control variable expenses. This saves you time from coming through spreadsheets, and it’s easy to print and present the information.
Fuel Expense Management
One of the most significant ongoing expenses for fleets is, of course, fuel. Of course, you cannot control the fuel price, but there are ways to reduce and manage the ongoing expense.
It’s recommended to track all fuel purchases. This way, you can determine the average cost-per-mile to forecast future expenses. Another significant aspect of fleet management software is that drivers can quickly log fuel entries, making tracking easier.
Fleet Maintenance Plan
Another great way to cut fleet costs is by taking a proactive stance on preventative fleet maintenance. While unplanned maintenance tasks, of course, happen, there are ways to stay on top of this. Try preventative maintenance (PM) schedule to ensure your fleet is on top of regular servicing, part replacement, and oil changes.
Again, fleet management software can track this and set mobile reminders, so you never miss a servicing.
Parts Inventory Improvement
Vehicle parts make up over one-third of maintenance costs. This is why it’s vital to have a robust inventory management system in place. While it’s challenging to balance keeping inventory on-hand and purchasing unnecessary parts, fleet software can once again help.
Software can track quantities, receive re-order notifications and assign parts to work orders. Now, you can trim your inventory of items you don’t use and eliminate them in future purchases, saving your fleet business money.
Start Saving
While fleet management costs are versatile, there are ways to keep costs down to keep more money in your pocket. Try the tips above and see what it can do for your fleet business.