Financial Data
Updated 29 Sep 2020

Controlling costs

Is your business haemorrhaging cash and you don’t even know it?

26 November 2012  Share  0 comments  Print

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Every single business has a fleet. This could be one vehicle or 30 vehicles, but regardless of how large your fleet is, transport is a significant business cost.

The question is, is it a normal cost of doing business, or does mismanagement mean your are losing money, often without even realising it?

“In developing the Fleet Information Management System (SIMS) offering, we noticed that many of our customers, particularly SME owners who did not have transport management backgrounds, simply were not aware if their fleets were being mismanaged, or even if they were the victims of fraud,” says David Molapo, head: Fleet Management, Personal and Business Banking, Standard Bank.

“Our fleet management products allow business owners to track the individual vehicles of their fleets online, and at a glance they can see if there are any red flags, because the system is set up to monitor each vehicle against a national average of the same model, make and aged vehicles, in similar mileage brackets.”

This means that when a vehicle’s cost-per-kilometer (cpk) is 500 cents instead of 21 cents, the business owner is alerted – and is able to investigate.

Capping fuel costs

“The costs associated with vehicles include fuel and maintenance, but what many business owners don’t realise is how tyre pressures, the right tyres, driving habits and even if the vehicle is serviced timeously can affect fuel consumption,” explains Molapo.

“If your fleet does high mileage, this can result in a significant fuel saving, particularly with e-tolling set to increase transport overheads.”

And of course, none of this even takes into account fraud.

Stopping fraud in its tracks

Fraud can be large and small, and often the smaller and more innocuous it is, the more it goes unnoticed – and yet the damage to businesses is still being done.

“We have implemented a number of systems that combat fraud,” says Molapo. “For example, a fleet card linked to a vehicle with a 60 litre capacity tank cannot charge for 120 litres. Cards cannot be swiped within certain time frames, and only fuel can be purchased.”

Since implementing these stringent processes, Standard Bank has blocked R214 million in fraudulent transactions, and expects this to reach R228 million by the end of 2012.

This translates to a direct saving for the owners of the 44 000 vehicles operating under the FIMS system.

As a business owner, the buck literally stops with you. How aware are you of all the costs that affect your bottom line? Have you evaluated these versus industry norms? You might be spending money that could easily be saved.

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