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Expense Control Systems
The management of a fleet of vehicles has become an extremely complex area of business management. Unfortunately traditional business methods tend to be used to control operations.

One of the methods is budgets. These are necessary from a general business point of view. However, real cost control can only be implemented if the control system produces facts in terms of c/kms!

Budgets DO NOT control fleet operations. They merely put limits on total expenditure. Furthermore, budget accounts are so divorced from each other in the general ledger that it is often difficult to extract the necessary total fleet cost information. Unless c/km figures are available and used effectively it is a reasonable assumption that the fleet costs are not being properly controlled. Over 500 000 fleet vehicles use a fleet management system in South Africa. A card is used to assist in purchases and payments. Monthly reports are produced in various forms to assist in managing the fleet. The concept of c/km is well established in these methods.

The basic problem however, is to ensure that this management information is used effectively and timeously.

These fleet card systems in their current guise were introduced in 1979, nearly 25 years ago. They were designed to produced reports to help manage the fleet. Unless the Fleet Manager is thoroughly trained in their use - assuming that clear responsibilities and authorities have been established - the whole reporting system rapidly falls into disuse.

Yet these systems are essential to control fleet expenses properly. It is management's life line in controlling the fleet, reviewing previous decisions, developing cost trends, making future plans and decisions, setting operational standards, reviewing present costs, creating cost comparisons, etc, etc.

Time must be taken by management to set expense control standards and procedures. There must be a two-way flow of information within the company. The one major problem with current fleet management systems is the proliferation of paper. The best option is to integrate an internal, flexible PC orientated system into the control procedures.

A method to do this is set out below in outline format however, this will need to suit your local situation: -

a) Continue to use a fleet card system for purchasing fuel and other services.
b) Review present payment methods. If the weekly ACB system is not being used, the interest charges will be higher than necessary.
c) Develop the concept of data input from the fleet card system to an internal computer system.
d) Enter own fixed data into the computer system.
e) Install the system at Branch /Divisional level PC system for all fleet management controls.
f) The same system would be installed at Head Office level. Overall control would be achieved at this level.
g) The system would be linked internally at all levels.
h) The fleet management system would be the external link to down load vehicle data.
i) Set up the basic operating and reporting procedures required.

This type of PC based fleet management system will shortly be available from Yuishin Fleet Management. It will be flexible, user friendly and able to produce user required reports on an "as and when" required basis. Standard reports can either be hard copy or merely reviewed on the screen. Information is available on a real time basis to ensure good management decisions at all levels.

Management information must also be readily available at executive level to assist in managing fleet operations.

As already mentioned, good decision making is essential. One important reason for companies having a proper expense control system is to ensure that the controls implemented over their transport operations are sound and cost effective.

Without timeous, meaningful and quantifiable information, it is almost impossible to make good fleet management decisions. The objective of reviewing policies based on c/km information is ultimately to reduce costs to an acceptable level relative to fleet operations.