This article looks at how a company fuel card works and the benefits for both the business and its employees.
Working out in the field means there’s a much greater need to be organised, carrying all the necessary equipment and preparing in advance for meetings.
Whether you are responsible for distribution and delivery or are a role in sales and relationship management, being out and about means you will need to fuel your vehicle for business purposes.
There’s several ways to manage the accounting behind this, some more onerous than others. One option which offers advantages to both the business and the employee is the use of a company fuel card.
We take a close look at the use of company fuel cards and how they can be a far preferable option for employees.
How do fuel cards work?
If you’ve never used a fuel card before, you might not be exactly certain of how it works but in practice it’s remarkably easy.
Your company issues you with a fuel card which you hand over in lieu of a credit card or cash when paying for fuel.
A common misconception is that you might be limited to the stations you can use. While not every single petrol station will be in the fuel card scheme, a vast number are. If you want to know where your nearest refuelling point is you can either use an online site locator or smartphone app to track your nearest one.
In practice, you will never be that far away from a station that accepts fuel cards. Some of the biggest names are part of fuel card schemes including Esso, BP, Shell and Texaco.
We will now take a look at why they are so popular with employees.
Hassle-free payment
As mentioned above, when you need to fill up, you simply need to hand over your company fuel card at the cash point.
No need to carry a credit card, cash or any other means of payment; the fuel card is the only piece of plastic you need to get your tank filled up.
The fuel card company will bill your company directly with a group invoice for purchases from all drivers, so it’s a hassle-free option for all concerned.
Less paperwork
HMRC are very strict on employee expenses and fuel costs are something which are often a particular concern to them.
Without the use of a company fuel card, employees are required to keep paperwork which shows how much they spent and on everything. This typically means having to keep tatty receipts from fuel stations, an inconvenience and an administrative headache.
Because fuel card providers send detailed invoices to employers, there’s no need to keep the receipts. HMRC view these detailed receipts as sufficient for their purposes, removing the need for employees to keep further paperwork.
No need to pay costs upfront
Depending how your company manages reimbursement of expenses, having to pay fuel costs up front can be an expensive business.
Even if your employer refunds expenses promptly, there’s still an inevitable delay as you hand in paperwork and get it processed. This leaves you out of pocket while you wait for your claim to be handled.
Many larger firms process expenses once a month; if you regularly drive on the road this means you will always be out of pocket, waiting for your employer to refund you the money you were forced to pay out in order to be able to do your job!
A fuel card means that you don’t have to submit expenses claims and you won’t have to use your own money to subsidise your employer’s costs until they refund you.
No questions
Unfortunately there are some employees that use the expenses system as a way to try and squeeze more money out of their employer.
This means that if you submit an expense claim, you may well face a lot of questions about exactly what you paid for, when and why. This can be extremely tiresome, particularly if it’s an integral part of your job and remembering exactly why this month’s claim is higher than last month can be a hassle you could do without.
With a fuel card account, your employer will be invoiced directly and will see exactly where you stopped for fuel, how much you paid and on what date and time. There are no annoying questions for you to answer as everything is documented and supplied directly by the fuel card provider.
How do company fuel cards work
Fuel cards are a flexible way for employers to manage their costs, but make no mistake; they offer huge benefits to employees too. Avoiding the need to keep paperwork, make lengthy claims or even cover costs out of your own pocket, a fuel card is the sensible option for every business.
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