As funding levels continue to diminish, fleet managers are facing increasing pressure to do more with a smaller budget. However, they have to get past the accountants first.
If a fleet manager is able to challenge and argue a case in financial terms to the accountants then their chances of getting a proposal approved improves.
“On the other hand, limited or no financial understanding is almost certain to see the argument lost with the accountants,” says Manager Fleet Services at Bundaberg Regional Council Andrew Railz.
“Most fleet managers know instinctively what is viable and what is questionable – the skill to present this in a financial forum is the challenge for the modern fleet manager.”
Railz advises fleet managers gain these financial skills in the following ways:
• Liaise with Council’s internal accountants to better understand the budget structure and where fleet budget, income and expenses come from.
• Implement monthly reporting on fleet budgets
• Analyse your budgets
– Have you overspent, if so where and why?
– Have you achieved your predicted plant hire income?
• Participate in quarterly budget reviews
• Seek advice from fellow IPWEA Fleet members through Ask Your Mates forum
How to be creative on a budget
On top of the challenges like cost shifting from state governments, a lot of councils face the prospect of ageing infrastructure that will require replacement.
Railz encourages fleet managers to get creative with their budget – just because something has always been done a certain way doesn’t mean that it is right.
He gives the example of partnering with a third party supplier for a parts contract that includes delivery, which means mechanics do not have to leave the shop to collect parts.
On a grander scale, fleet managers can apply the same principle to the ownership of fleet assets – should they own or lease machinery in light of the current market?
Local Government tends to have lower utilisation rates for things like rollers compared to a contractor, for example. In light of this, Bundaberg Regional Council recently re-evaluated its ownership of rollers.
“With the downturn in the resource sector and major contracts being finalised in Central Queensland, rollers are currently freely available for hire at very attractive rates,” says Railz. “Therefore, Council is considering the option of hiring in construction rollers as required rather than owning them.”
“It’s important to note that if the market ‘heats up’ and demand for hire rollers increases (along with the hire rate) Council has the option of re- purchasing rollers to cover internal construction activities.”
Top tips on how to be creative on a budget:
1. Challenge the norm
2. Review service levels
3. Look at third party alignment
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