Planning for the most effective use of your annual budget is a challenge that many fleet operations managers face. While the ultimate goal is to find ways to reduce your overall business costs, sometimes you have to invest a little extra in order to save a lot.
Alternatively, you can find creative ways to spend your existing budget on a resource that promises to deliver maximum ROI—such as fleet management software that saves you time, money, and stress. An effective fleet management system uses GPS technology to track vehicles or assets and provide accurate, valuable data through active monitoring and automated notifications. If you’re in the fleet management field, then the correct fleet management solution can help to provide your company with a competitive edge.
If you’re trying to find the resources to invest in fleet management software, then evaluating your capital and operational expenditures might reveal some flexibility in your company’s budgets. Keep reading to learn more about the differences between these two types of budgets and which one might be best for your company to leverage for fleet management software.
When businesses analyze their costs, it’s often split up into two categories: capital expenditures and operational expenditures, known as CapEx and OpEx. These categories help a company account for various expenses, whether recurring or one-time.
As a general rule of thumb, the CapEx budget is used primarily for investing in the long-term goals of your business or organization. Some examples of this can include purchasing new or used big-ticket equipment or making updates or improvements to existing assets to increase the value of your business.
Capital expenditures can include physical assets such as:
On the other hand, the operational expenditure (OpEx) budget, is primarily used for handling the ongoing or daily costs of operating your business or organization. These types of costs can include a number of expenses like:
There are pros and cons to using capital expenditures (CapEx) versus using your operational expenditure (OpEx) budget when it comes to investing in a fleet management system. However, it’s good to know that there may be some flexibility in having options about which budget you can use.
By planning to use CapEx funds, it leaves your operational budget intact to handle any unexpected costs that may pop up during the budget year. However, if you don’t want to wait to start reducing your costs, you may be able to use some discretionary funds that are available in your OpEx budget to cover the cost.
There are a number of ways that an effective fleet management system can help your organization or business save money! Some of the top benefits of leveraging fleet management software include:
At its most basic level, GPS fleet management helps you keep track of your drivers and provide alternative routes in circumstances of road obstructions, traffic, or accidents. As such, it helps to minimize costs and maximize your operational productivity and efficiency!
Furthermore, by utilizing the geofencing capabilities of your GPS tracking software, you can create operational boundaries that outline the area in which your vehicles are supposed to be stored or operating. If for some reason your assets move outside that area at any time, you can set your software to notify you of the change. There are several types of geofences that you can use to help you achieve the best results with your tracking software solution.
While knowing the location of your vehicles or equipment is important, it’s just as crucial to know their conditions, operational performance, and productivity levels. GPS tracking devices are capable of gathering telematics, monitoring the performance and use of your assets, and providing you with measurable data. This real-time asset tracking data will help you to know whether the equipment or vehicles are performing at optimal levels or are in need of regular maintenance, which can help to reduce the need for larger or more costly repairs later down the road.
It’s one thing to know that your vehicles and assets are in a good operational condition—it’s another thing to know that your employees or customers are appropriately using them, too! If your drivers have poor driving habits like sharp acceleration or harsh braking, then your vehicle will endure unnecessary wear and tear.
Plus, distracted or irresponsible drivers create safety risks for not only themselves but also for other drivers sharing the road. These poor driving behaviors can lead to potential accidents, lawsuits, and negative publicity associated with your company or organization. Fleet management software can help you monitor your drivers’ behaviors and correct them before they become a bigger problem.
Many drivers are known to keep their trucks idling while making a delivery. When you have multiple vehicles operating this way, this fuel use can add quickly add up as additional or unnecessary costs.
With the power of fleet management software that creates efficient routes, your overall operations become streamlined and you can incorporate more customers since your drivers won’t be spending half their day driving back and forth. This also means you’ll save on fuel costs—and not accelerate maintenance schedules—by boosting the efficiency of your fleet routes. With the help of GPS tracking software, you also can reduce fuel costs by communicating alternate routes to drivers in the field.
GPS fleet management and asset tracking solutions can provide you with peace of mind knowing where your vehicles or equipment are located at all times. GPS asset tracking serves as a powerful theft deterrent, as well as a reliable recovery solution in the event your equipment becomes lost or stolen. With geofencing capabilities and other features like remote starter disable, you can be notified about the exact location of your asset and immediately contact the authorities.
Whether you choose to plan your budget to invest in fleet management in the future or want to use your operational budget now, Rastrac is here to help you get started! Since 1993, we’ve been entrusted to track more than $1.5 billion in assets around the world.
Our experienced and knowledgeable fleet management experts are ready to speak with you to learn about your organization’s tracking needs and provide a solution that will fit your budget.