What is fleet management?
Many small businesses rely on a fleet of vehicles for to operate. Fleet management ensures your fleet is efficient, cost-effective and compliant
Many small businesses rely on vehicles for the day-to-day running of operations – be it two vans or two hundred cars.
But despite the advantages these vehicles bring, having a fleet can be expensive and presents a number of logistical challenges.
Management of your business fleet is essential in ensuring maximum efficiency and cost control.
This article will cover:
- What is fleet management?
- How does fleet management work?
- Who is a fleet manager?
- Fleet management software
- Fleet management costs
- What is a grey fleet?
- Next steps
What is fleet management?
Fleet management is the method by which business owners manage a fleet of commercial vehicles to ensure it runs efficiently, cost-effectively and in compliance with government regulations.
Fleet management involves:
- Knowing the whereabouts of your company’s vehicles and the routes they take
- Understanding how those vehicles are driven
- Improving fleet productivity and increasing efficiency to maximise profit
- Ensuring vehicles are roadworthy and insured, and that drivers are safe
How does fleet management work?
At its most basic, managed fleet services use business vehicle tracking software to monitor vehicles' locations.
Using GPS, these systems can measure a range of metrics, including driver behaviour and vehicle use. Some even include remote security features to help prevent theft or find stolen vehicles.
Fleet management also includes a policy of maintenance and servicing, to ensure your vehicles are always in good working order.
Who is a fleet manager?
A fleet manager will either be you, the business owner, or someone you appoint to look after the fleet.
A fleet manager’s responsibility is to be in control of logistics and oversee the day-to-day functioning of the fleet.
Making sure deliveries and collections are on schedule – and that your drivers get the necessary rest – is crucial.
Fleet management software
Fleet management software provides an abundance of advantages to help busy business owners keep track of their fleet. Dependent on which provider you opt for, these advantages include:
- Admin reduction
- Improved safety
- Improved efficiency/ cost savings
- Compliance with government regulation
Choosing a supplier
There are many different fleet management software providers to choose from.
Thorough research of their various offerings will help you decide on the supplier that best fits your needs.
You should consider:
- Whether the software is targeted at a business of your size and aligns to your goals
- How the system integrates with other key small business platforms including HR, finance etc.
- Whether the supplier has ISO accreditation, legislation compliance and DVSA compliance
- Trialing your chosen system before committing
Learn more about fleet management software here.
Fleet management costs
There are a number of factors to take into account when managing costs, including running costs, fuel, and tax.
It’s good to have an understanding of how your costs should stack up, so you can budget appropriately and check for anomalies.
Ensuring the fleet is cost effective is the responsibility of the fleet manager.
- Maintenance costs – keeping your fleet on the road will be an ongoing cost. Don’t avoid regular check-ups in a bid to save – it could cost you more in the long run
- Fuel cost – in order to keep costs down, your business should be continually checking where to get the most economical fuel prices
- Tax – the amount of tax paid per vehicle is dependent on the make and model of the vehicle. Taxis include vehicle excise duty and company car tax, which are both affected by CO2 emissions (you can find a breakdown of company car taxes here)
- Fleet management software – dependent on the size of your company, and the number and type of vehicles you need to track
Read our in-depth guide to fleet management costs here.
What is a grey fleet?
A grey fleet is when employees use their own private vehicles for business travel. Around 14 million drivers use their own vehicles for work in the UK.
As a business owner, you’re still legally obliged to manage those cars and their drivers. If you haven’t checked the cars are insured and roadworthy, and that the driver is fit to drive, then you could be liable for prosecution.
The above is an overview of the practicalities of running a business fleet. Thanks to the latest technology, it’s never been easier to keep track of your vehicles and drivers, ensuring efficiency, cost-effectiveness and compliance.
In the following pages, we take a closer look at some of the key issues you’ll be facing when managing a fleet for your business.