Fleet management is a job requiring professional attention. Ensuring that you have a firm grip on all aspects can be difficult while juggling all other responsibilities of running a business. It’s often best to take cues from larger companies with larger needs and the benefit of a CFO and business consultants. Following the lead of larger firms helps your organization leapfrog toward the partnerships and strategies that will enable future growth without having to blaze the path yourself and stumble along the way. Managing a fleet of vehicles encompasses a wide variety of daily tasks. This article discusses the top 20 industries that see massive benefit from utilizing a fleet management company relationship.
The advantages include:
- Administration efficiencies
- Cash flow
- Tax savings
- Risk management expertise
- Fleet strategy and peer best practices
- Lower vehicle cost
- Fleet leasing services
- Vehicle selection and equipment upfitting – best practices
- Maintenance and fuel management improvements
- Telematic solution expertise
First, let’s dive into some of these advantages:
Administration
- Formalized fleet management policies ensure consistency across the organization.
- Saves time, allowing company leaders and managers to focus on the business.
- Maintenance programs
- Driver testing
- Best practices
- Ad hoc advisory services when you need it
- Simplicity – let your fleet management firm do the leg work.
- Ordering vehicles
- Upfitting
- Delivering vehicles
- Titling
- Resale/remarketing vehicles
- Ensures brand consistency and puts your drivers in newer vehicles.
Cash Flow
- Lower acquisition costs – If you lease vehicles through a fleet management company, companies can take advantage of fleet rebates, buying power, and the fleet management company’s relationships with suppliers. Factory ordering can further reduce costs.
- Lower monthly payments – Through leasing, you only pay for what you use, not the entire purchase price. When you purchase a vehicle, you pay for the entire cost of the vehicle.
- Save on sales tax
- Purchase option at end of lease lowers monthly payment
- Cash flow savings – Lowering your monthly payments allows you to put more vehicles on the road or simply preserve cash for other strategic uses.
- Preservation of credit line – Don’t use your line of credit to finance your vehicles. Use it for activities that will grow your company.
Taxes
- Sales Tax – When you lease a vehicle, sales tax is due on your lease payments. You do not pay sales tax on the residual value of the vehicle unless you buy the vehicle at lease end.
- Income Tax – Operating lease payments are 100% deductible. If you purchase a vehicle or finance a vehicle, there are limitations on annual depreciation deductions.
Risk Management
- Be proactive by having good processes and procedures in place to reduce the risk of accidents and incidents.
- Not only do accidents cost money to repair, but it impacts insurance costs, increases liability, and reduces the time these vehicles can be productive.
- There are many tools available to proactively manage risk from policies regarding hiring, telematics, driver testing, as well as selecting the right vehicles for the job with better navigation and safety features that help prevent or minimize accidents.
A good fleet management company’s services are fully customized to each business’s needs. The specific benefits vary from industry to industry. Business owners will be able to benefit from streamlined quality service designed to support your business in every case.
Take a look the top industries where fleet management is widely used and has extensive immediate benefits.
The Trades
Companies of all sizes can benefit from increased cash flow. Additional fleet rebates, buying power, and strong relationships with suppliers all add up to lower acquisition costs and reduced monthly payments for lessees. This means letting you put more vehicles on the road, and preserving your credit line for other areas of company growth. Here are a few examples:
- Mechanical Contractors /HVAC
- Electrical Contractors
- Roofing Contractors
- Painting Contractors
- Construction Contractors
- Plumbing Contractors
Service Firms
Cutting down on taxes is in the best interest of any business, and service-based industries are no different. Imagine your engineering or pest management firm benefiting from 100% deductible lease payments, sales tax savings, and improved financial ratios that reduce bank borrowing costs. All of the savings add up to more capital filtering back into the business. Some of the firms reaping these benefits include:
- Engineering Firms
- Pest Management Firms
- Fire Protection Service Firms
- Restoration Contractors
- Cabling/Technology Firms
Healthcare
What is more important than keeping drivers safe and secure while on the road? By leasing with a fleet management company, you can be proactive about risk management by setting in place processes and procedures that reduce the risk of accidents and incidents alike. This means that vehicles stay on the road longer, generating income while avoiding increased insurance premiums.
Some of the safest drivers come from industries like:
- Home Health Services
- Laboratory Services
- Assisted Living/Retirement Communities
- Pharmaceutical Services
- Durable Medical Equipment Providers
- Transportation Services – Elderly / Disabled
Corporate Sales/Service Organizations
Professional fleet managers experience allows businesses to focus on what they do best, without adding on additional tasks that can distract from company growth. Maintenance programs, driver testing, best practices, and advisory services are all rolled into a single package. It’s far less costly and ensures far more long-term continuity than any alternative. Formalized management policies ensure consistency across the entire organization and allow for brand consistency. Sales fleets that benefit most are in the following industries.
- Manufacturing
- Insurance
- Utilities
Conclusion
When resources are tight, the only way to keep your business’s momentum is to rely on value-added services that contribute to your company without piling on unnecessary fees, employee headcount, or complicated processes. Make sure you align your fleet management company selection with your size and your needs. Fitment and service are the most important and most overlooked aspects of fleet management.
You can learn more about the specific benefits fleet management services can bring your company by getting in touch today!
