Monday, January 27, 2020

CONTROL OF FUEL EXPENDITURE FOR TRANSPORTATION INDUSTRY PART 1


Hello, all…
On this occasion I will share something of the ideas that I already have practice it in the company. This idea has also been used in some companies, which in fact the company that deals in areas are related to many land transportation, from small to large scale of vehicles such as Bus or Truck.

We know that the daily cost of such an industry is Fuel which is the material for them to operate properly.

Due to fuel is managed by gas stations and we have to spend substantial funds every day for fuel financing, then I will give you suggestions on how we can make control the use of fuel to be more secure, as well as beneficial from the financial side.
                                
"Making an agreement with gas stations"

Those benefits are:
      1.      There will be control from both parties (company and the gas station)
      2.      Charging fuel will be done by following a mutually agreed system
      3.      Charging fuel will be more scheduled and systematic
      4.      No need to spend money to purchase of fuel by cash every day
      5.      Verification between both parties

Gratitude or as I say weaknesses are:
      1.      Gas stations will request a deposit according to the estimated value of gas stations to finance first. Usually the estimation is in a matter of weeks. This means we have to plant a considerable amount of funds to the gas station. This deposit is not kind a guarantee (it’s some kind like an investment fund).  
      2.      The company shall establish an agreed system with the gas station on the mechanism of filling and verification of billing (I’m sharing this in another article which is one of my general suggestions too, if the company cooperates with gas station)
 3.   The company have to be prepare an officially form as a fuel voucher to anticipate any fraud cause of in-responsible officer
  
Thus information from me, I hope it will be useful for you the candidates of CFO or COO in this country.
 
 Thank you and see you again soon…

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