Akin: Fuel expense management: Switching from a point solution to a platform

Given how much money fleets lose by paying for their expensive fuel card usage (such as for hidden fees), it is important to stay informed about new technology options out there. Nowadays, there are two types of solutions available: point solutions and platform solutions.

Understanding the differences between these solutions in terms of flexibility, scalability, and adaptability is crucial for determining which best suits your business needs.

In this current economy, fleet operators must pay close attention to their fuel expenses. The complexity of managing fuel is increasing due to more fraud, rising fuel prices, and the transition to EVs. Therefore, there’s a more pressing need to implement fuel risk management solutions and adopt modern strategies to support the evolving demands of your fleet.

What is a point solution?

Point solutions are independent, specialized tools tailored to tackle a specific issue. They usually lack integration with other tools or systems and are not intended to address larger, more intricate challenges.

In the context of fuel management, the most common point solution is fuel cards. These cards are designed to enable drivers to purchase fuel, offering basic levels of expense tracking, card control, and fleet reporting. However, the scope of what can be controlled and monitored is relatively limited to fuel purchases. Additionally, fuel cards don’t have real-time reporting, meaning data on spending habits and other metrics are not available immediately, nor are you able to block suspicious transactions. This delay reduces the user’s ability to make immediate decisions based on current fuel usage.

See also: Diesel prices still dropping, avg. $3.76/gal, gas up to $3.484/gal

What is a platform solution?

In contrast, platforms offer comprehensive solutions that provide a holistic approach to addressing a business problem and integrate with all your business tools. For example, fuel management platforms offer a comprehensive solution that goes beyond merely purchasing fuel. These platforms integrate various data points and technologies to provide a detailed view of a fleet's fuel consumption, such as from telematics, fleet management software, account tools, and asset management tools. 

A fuel management platform tracks not only when and where fuel is purchased but also how efficiently each vehicle uses that fuel and shares those insights with the user.

Proactive fuel risk management vs. legacy solutions

Proactive fuel risk management has been a novel approach in the industry in the last two years. By using modern fuel/fleet cards combined with an AI-driven expense platform, it is possible to proactively monitor and prevent fuel theft and fraud while maintaining accountability for fuel usage. Most fleets find that they cannot account for approximately 11-15% of their fuel at the end of the month, representing a significant sunk cost, which can be easily prevented with fuel risk management platforms.

This proactive approach differs from the reactive approach used by legacy fuel card providers. Typically, with legacy card providers, customers receive a statement listing all fuel transactions at the end of the month. A team then reviews these transactions to identify anomalies such as fuel theft, fraud, or misallocation of fuel, which requires significant manual labor and incurs additional costs for the fleet (i.e., additional headcount, countless hours spent creating reports, etc.)

With a proactive approach, there are three authorization points before issuing any fuel. Fuel is not issued unless the vehicle, driver, and fuel card are all physically present at the pump. This method prevents theft from occurring in the first place, avoiding awkward and often unproductive follow-up conversations between the fleet and drivers about discrepancies noted 30 days after the fact.

As a starting point for operators, it is important to learn about the differences between point solutions and platform solutions. This will drive decisions on the different technology solutions you can use to implement automation, fleet reporting, and advanced analytics for your operations. Adopting proactive fuel risk management strategies can enhance the efficiency and security of your fleet and drive costs down.