As a busy Tradie one of your biggest overheads after wages and materials is maintaining a fleet of fit for purpose vehicles. Depending on if you are a sparkie, drainlayer or a civil contractor you might have a few vans, utes, earthmoving equipment or even truck and trailer units and it is important to keep on top of the maintenance required to ensure that they are running well.
One of my clients had an engine blow up in his Kenworth wheeler last year and that was a $60k repair job that he hadn’t been planning on, not to mention he had a driver that was expecting a weekly wage and letting his clients down.
And don’t get me started on 2022’s fuel price increase which has seen my fuel bill double. Thankfully I work from home these days and therefore only need to fill up my 75L tank once a month, but unfortunately for your Trade Service business this would have increased your overheads which has forced many of you to pass this cost on to your customers.
For as long as I can remember, I’ve had it in my head that having a company vehicle was an additional $10k on top of your salary package, but in 2022 is this correct? This prompted me to work it out.
Let’s look at some interesting stats…
•There are currently 762,230 registered vehicles in NZ.
•And 142,143 are flat-deck truck, van or utility vehicle.
•Of those 79,947 are diesel and 62084 are petrol.
So, I decided to work out how much a late model Toyota Hiace would cost a business. Have a look at this graphic below:
* Calculated on 13th November 2022
* Fuel cost is diesel at $2.89 per litre
* Annual kilometres travel is 35,000km
* Service pricing and litres per 100 from CARJAM
* Finance is a monthly cost of $973.23 based on a $10,000 deposit over 48 months.
Now fuel is a fluctuating cost in this calculation but holy hecker an annual cost of $14,406 and $34,431 once you add on finance and depreciation. When I initially ran these numbers back in April 2022, it came out to over $15,000 per year.
If you’d like to work out what your vehicles are costing you, please download the calculator here.
Xero Tracking
In Xero you can set up tracking which I often use for tracking the costs of each vehicle. Whenever an invoice is received it is allocated to the vehicles’ registration. This way I can run a transaction report and see all the expenses for a specific vehicle. This is great when you want to see if a vehicle is starting to cost you more and therefore if it’s time to sell it.
With the rising costs of fuel this year, it is more important than ever that your fleet is running efficiently.
Review Fuel Cards and pricing
When was the last time you reviewed your pricing from the likes of Mobil or Z Energy? Are there any membership discounts that you’re not accessing. The likes of ECANZ and Master Plumber often have discount for their members.
Look for alternative suppliers
Have you done any research lately on who is offering better pricing on fuel? One of our clients recently invested in a 4000L fuel tank from Waitomo Fuel at the yard to fill up his Six-Wheeler truck and the excavators. We can log on and see who and what plant they have been filling up. The tank is all digital and lets Waitomo Fuel know when it dropped below a set level and requires filling up.
Gaspy
Have you heard about the Gaspy app? You can download it and find the current fuel pricing based on your location.
CardSmart (Any service station)
Do you work all over? Are your team members having to hike out of their way to refuel at your fuel card supplier? There is an alternative, CardSmart, while you may be paying a premium price for the fuel over other providers if you start considering how long it is taking them to travel to refuel and the time that they are away from site not doing chargeable work the benefits of being able to refuel anywhere can be very appealing.
Click here to check it out.
Here is a recap of the 7 steps to implement to try to track and potentially reduce your business fuel spend:
1.Xero Tracking for Repairs & Maintenance
2.Xero Tracking for Fuel
3.Review Fuel Cards and pricing
4.Look for alternative suppliers
5.Association Discounts from ECANZ & Master Plumbers etc
6.CardSmart (Any service station)
7.Bulk buying fuel
What is your fleet costing you to run?
Download our Vehicle Cost Calculator today.
For more information on the admin and vehicle related services that Virtual Coastie offers please visit our website and follow us on Facebook and Instagram so that you stay updated (we share some gems sometimes).
