Fleet card management is commonly promoted as an effective way to oversee your company’s fuel-related expenditures. The idea is simple: give your drivers their own credit cards to pay for their work expenses so you can better control spending and reporting.
However, using fleet cards often presents their own problems. Keep reading to learn our top four reasons to keep your fleets credit card free.
In theory, fleet cards are supposed to make it easy for drivers to pay at the pump. In reality, however, drivers need to also remember driver ID numbers, odometers, and keep track of receipts, all while making overseeing expenses a downright pain for fleet managers. With an immense number of transactions to oversee, human involvement in maintaining records often introduces error. From simply entering incorrect data to misclassifying an expense, human mistakes are costly and can lead to inaccurate financial reporting and potential tax compliance issues.
There are several ways that fleet cards, while offering various benefits, can create a significant amount of additional administrative overhead. Every purchase made with a fleet card needs to be logged and properly classified, and all logged expenses need to be reconciled with company records. This is a time-consuming process, especially if there are discrepancies that need to be resolved.
Unfortunately, it’s all too common for drivers to leave their card in an unsecured location, lose it, or fall victim to card skimmers. These are devices that fraudsters place on a pump to look like a card reader. When the driver swipes their card, the device captures and steals the cardholder data. In order to detect and quickly respond to any fraudulent activities, constant monitoring is needed, which can be difficult to devote the necessary attention to.
On top of that, it’s an unfortunate reality that some drivers may be dishonest about their fleet card usage, even after they’ve been educated on the company’s policies and the consequences of fraudulent activity. For instance, a driver might use their card to fill a personal vehicle with fuel or share their card with someone outside the company. It’s also not unheard of for a driver to collude with a vendor to exaggerate the amount of supplies purchased.
With fleet cards, the term “driver fiction” refers to any general challenges or inefficiencies that drivers experience in using fleet cards. Since fleet cards are all about exercising control, driver friction is often inevitable and can result from the following policy areas:
These are just a few of the common fleet card policies that companies often have to create, communicate, and enforce. As you can see, fleet card management can quickly become complex, potentially disrupting operations and burdening the management team.
Managing your fleet doesn’t have to be a headache. Car IQ is a better way for fleets to pay, all without the need to use a physical credit card. Vehicles connect to the fuel pump and pay, so drivers simply need to pull into the station, select the pump number, and let the vehicle take it from there.
Interested? Let’s start a conversion today.