Mycompanyfleet predicts tough year ahead for industry
Jon Tandy (Inset), business development manager at Mycompanyfleet, the automotive division of global HR software supplier, NorthgateArinso, said the coming year would be challenging for most organisations, due to the impact of the Government’s spending squeeze which would really bite this year and the continued impact of rises in taxes such as VAT, Benefit-in-Kind taxation, National Insurance and fuel Excise Duty.
Also companies were likely to suffer from restricted credit as the banks sought to improve their liquidity ratios in line with line with the recommendations of Basel III, a new global regulatory standard on bank capital adequacy and liquidity which says banks must improve their equity levels in relation to their indebtedness.
As a consequence, some banks have begun selling off assets to shrink their balance sheets and reduce the amount of equity they need to hold. At the same time, lending criteria have been tightened, with the outcome that businesses may find it increasingly difficult to obtain the necessary credit to run their operations.
However, that did not mean that businesses should turn-off the investment tap, said Tandy, as making the right investment in the most suitable systems could pay dividends in controlling and managing fleet costs more effectively. But companies that simply cut investment would find that in the long run this would actually cost them money through increased inefficiency in fleet practices and procedures, he said.
Tandy said: 'If investment is axed, organisations may well find they become less efficient and costs actually escalate.
'During 2011, we have seen a number of businesses operating several thousand vehicles invest in our fleet management technology to improve their operating efficiencies, manage and reduce fuel expenditure and ensure they are compliant with the latest HMRC and health and safety legislation.
'Typically, the decision to invest comes when realisation dawns that current practices, such as using spread sheets for example, are in fact costing money due to their inefficiencies. Investment in the correct fleet management software systems really makes a difference to fleet efficiencies, not just in the long run but can begin paying back almost immediately.'
One key fleet cost battleground for 2012 is again going to be fuel cost management, believes Tandy, despite the Government’s decision to postpone a planned 3ppl rise in January. The impact of the rise in VAT and a planned increase in Excise Duty for August is likely to have a further inflationary effect on near-record prices at the pumps.
The latest software systems, like Mycompanyfleet’s FleetAcumen for example, can visually display key cost centres to show fuel expenditure against budget, and to highlight any areas of potential or actual overspend.
The system can be easily configured to show league tables of the top ten most fuel efficient drivers and vehicles on the fleet and those which are the worst, so that fleet managers can take decisions quickly and effectively to remedy the situation.
'If necessary, fleet managers can use our system to name and shame the worst offenders and to highlight the least fuel efficient vehicles on the fleet. Tough times sometimes require tough measures,' added Tandy.