Fleet financial control: mistakes to avoid

Fleet financial control is the practice of recording, keeping track of, managing and regulating expenses related to the company's vehicles.

The main goal is to keep close track of spending and understand where money is going. This includes everything from fuel costs to maintenance, repairs, parts, services and unexpected expenses.

It also helps assess whether resources allocated to vehicles, tires, fuel and maintenance are being used in the best possible way, without turning controls into an automatic promise of savings.

There are several items to consider when establishing your control method. One particularly important item is creating a realistic budget. This is already common sense in fleet management, but it is not always a reality.

So, before we continue:

What mistakes should be avoided in fleet financial control?

One of the main mistakes is not having a clear understanding of what fleet financial control involves, something we will also cover in the next section.

Other mistakes that may be happening include:

Failing to update expenses

An important part of financial control is keeping expense records up to date. This information makes decisions about your fleet's operations and budget more accurate.

In many cases, implementing a control method, whether through a spreadsheet or digitally, is the easiest part. Updating records afterward and entering invoice data for services provided or fuel refueling is the least appealing task.

One thing you need to understand: this is an extremely necessary part of fleet financial control.

Without constant updates, any cost management is pointless because you are not actually using your setup. So look for a solution that works in your routine as a fleet manager.

Besides recording the expense, keep supporting documents showing the amount paid and that the expense belongs to the operation. This makes later checks easier, prevents doubts about old entries and reduces the chance of the budget becoming just an estimate.

If you need an integrated system, for example, bringing payment data together in one place, technologies for this already exist. The point is not to adopt the most complex tool, but to find the best solution for your transport operation.

One extra point here:

It is common to find people who overlook those 5 cents in a R$140.05 fuel purchase in Brazil. Likewise, people often forget to record unexpected expenses in their system.

Depending on the size of the operation, each 5 cents can add up to a large amount at the end of each month. Similarly, failing to account for “surprise” expenses creates budget gaps whose origins you may not remember later.

The confusion afterward will be considerable, so here is a warning: be very careful with these issues and treat small entries as part of the method, rather than as dispensable details.

Neglecting the analysis of recorded information

Directly related to updating data, analyzing it is just as important. Fleet financial control is divided into these fundamental steps:

• Implementing a control method;
• Constantly updating all fleet expenses;
• Analyzing costs to understand fleet performance and look for actions that further optimize the carrier's use of financial resources.

This is the organization you need to include in your daily routine to truly make fleet finances a source of useful information, rather than a constant concern and cause of stress.

Records show what was spent; analysis shows patterns, deviations and priorities. Without this step, the company may accumulate data but misses the opportunity to compare periods, understand recurring costs and decide where to act first.

Making mistakes when setting goals

It is difficult to stay on course and make informed decisions about where money should be spent without a plan to follow. After all, if you do not know where you want to go, how will you know whether you are on the most suitable path? Or even how to correct issues?

That is why you need to set some goals for your fleet's financial control.

The first step consists of the two previous actions: gathering information and analyzing it carefully. This gives you a reference for what kinds of figures to establish in your planning, setting goals that match the reality of the operation.

Goals also allow the manager to observe the strengths and weaknesses of their management, making it easier to identify where to invest in further training or process optimization.

Goals without a basis in data tend to become abstract demands. Goals supported by records, on the other hand, help distinguish achievable savings from what depends on supplier negotiations and what requires a process change.

Which items should be considered in fleet financial control?

One of the most important factors in fleet financial control is choosing the right control system. This allows you to keep track of your finances and make better decisions about where to allocate resources.

It is important to do some research and find a tool, spreadsheet or software solution that meets your specific needs, the size of the operation and the team's ability to keep data up to date.

Today, some alternatives even work as a digital bank, as well as allowing cost control and visualization.

Take a closer look at other crucial factors in establishing fleet financial control:

Maintenance

Repairs and fleet operating expenses at a road transport company can easily become excessive if they are not controlled. Better-managed operations have a system for managing these costs.

A history of issues, solutions adopted and related costs makes it much more practical to understand spending and set appropriate budgets for each period. Digital maintenance management or an electronic checklist platform can therefore help organize this history and reduce reliance on scattered records.

When you establish a cost forecast based on actual data from the fleet's routine, the forecast tends to be more consistent with the operation. Even so, it should be reviewed whenever prices, routes, vehicle usage patterns or maintenance frequency change.

Remember to consider the different types of maintenance performed in the fleet: preventive or predictive, and corrective.

Keeping maintenance up to date can also prevent larger expenses later. In fuel use, for example, well-maintained vehicles tend to waste fewer resources than vehicles operating with ignored issues.

Parts and services

Companies should understand what they are looking for when trying to find the right supplier. Some key factors are:

• Price: although getting a good deal is important, the cheapest option is not always the best. It is also important to consider the quality of the service provided: you do not want your vehicles breaking down or needing repairs more frequently than necessary.
• Efficiency: the more agile and efficient your fleet management is, the less money you will waste on unnecessary costs.

Forming these partnerships with reliable suppliers and service providers makes a difference in generating fleet savings, as well as providing stability and guarantees on services and purchases.

When comparing suppliers, also consider how easy it is to substantiate what was approved, carried out and charged. These records make financial analysis more reliable afterward.

Tools and/or systems

For fleet financial control, you can include:

• An automated system to keep track of and manage vehicle purchase and fleet renewal expenses;
• A centralized database of vehicle maintenance records;
• A tire management program, calculating purchase and retreading expenses and identifying the models offering the best value for money;
• Integrated accounting software that can keep track of fleet-related income and expenses;
• A platform with payment and credit line management for fleets, such as Target Bank;
• A budgeting and forecasting tool to help fleet managers make informed decisions about future costs;
• Tools to create reports on fleet performance and cost-saving measures.

Of course, you do not need to be limited to these. It is worth mentioning that you do not need to acquire them all at once either, only those that make the most sense for your transport operation.

Spreadsheets are also an interesting alternative if the fleet budget does not allow adopting a system immediately.

However, compare prices before making any decision. Sometimes a spreadsheet can cost more than a simple system that meets the requirements and also automates some tasks.

The main criterion is how well it fits the routine. A sophisticated tool that is seldom used creates the same issue as a forgotten spreadsheet: outdated data and decisions made in the dark.

Fuel

With diesel prices always changing, it is necessary to find ways to prevent cost increases whenever possible. One way to do this is by implementing a fleet tracking system that can help you monitor and optimize your routes.

Another is to invest in fuel-efficient vehicles, especially more modern models.

Keeping maintenance up to date is also a way to better control fuel expenses. A vehicle in suitable operating condition tends to perform better in fuel consumption.

Establishing efficient routes and schedules is another issue that cannot be neglected.

This way, you can avoid unnecessary fuel use from excessive acceleration or braking, or too much time stopped in traffic.

For this analysis to work, refueling needs to be consistently included in the controls, with supporting documents for the amount paid and its relationship to the operation. Without this history, it becomes difficult to know whether an increase came from the price, vehicle use, the route or a maintenance issue.

Want to understand more about what causes an increase in fuel consumption? Watch on our YouTube channel:

(video in Portuguese)