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Your fleet budget can be an essential tool when it comes to finding ways to track and lower your fleet expenses. In this episode, we go over steps that fleet managers can take to improve budget adherence as well as tips to leverage your historic expense reports to open up additional funds and opportunities in your fleet.
The Fleet Code

Finding Value in Your Fleet Budget

Dec 5, 2023

Your fleet budget can be an essential tool when it comes to finding ways to track and lower your fleet expenses. In this episode, we go over steps that fleet managers can take to improve budget adherence as well as tips to leverage your historic expense reports to open up additional funds and opportunities in your fleet.

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Welcome to The Fleet Code, a podcast brought to you by Fleetio where we dive into the latest fleet industry trends, technologies and best practices.

My name is Zach Searcy and I just want to go ahead and rip off the band-aid. Today, we're talking about your fleet's budget and why it's important for you to take steps to track and lower your fleet expenses. And I know what you're thinking: "Zach, why are we talking about my 2024 fleet budget when 2023 just started?" and I have bad news for you, it's December already.

I also cannot believe it.

But today, I want to prove to you that your budget is not a burden but an opportunity. And I don't just say that in a "what doesn't kill you makes you stronger" motivational poster from your break room kind of way. I mean it.

When viewed the right way, your budget helps you show your impact as a fleet manager and can also unlock additional expenses and opportunities for your fleet.

Let's dive in.

Why should you pay attention to your fleet budget?

Okay, so I don't know if you know this, but things are kind of expensive nowadays.

If that comes as a surprise to you, I'm sorry, but I'm all about honesty and transparency here.

The fact of the matter is that fleets cost money and economic factors are forcing many fleets to have to tighten up their operations, and so setting and reviewing your budget is necessary so that you can justify the money you are spending. For most fleets, you're viewed as a cost center. I always think back to the conversation I had with Tom from the City of Cambridge:

[Tom Rowlings] "A fleet is often the overlooked… the red-headed step-child so to speak. You know, we’re a cost center; we cost the company a lot of money."

But even if your fleet is considered the golden child and doesn't have any financial limitations – which let me just say that many of us envy you – but for those fleets without financial limitations, a budget is still a great way to measure your effectiveness as a fleet manager and show value to the leadership team at your organization.

… you know, to solidify your place as the favorite child, if you will.

A good budget allows you to identify excessive spending, figure out your fleet's cash flow, find ways to decrease overall spending, and also provide clarity around any additional expenses that you're anticipating for your fleet.

But how can you use your budget to prove the value of your fleet? I'm glad you asked. Today, I want to focus on some of the ways that you can use your 2023 budget and expense reports to set yourself and your fleet up for success in 2024.

However, if you're new to budgeting or want some guidance on how to accurately budget for all the costs that go into running your fleet, we put together a Fleet Budgeting 101 white paper that walks through the process of creating and adhering to a budget from start to finish.

You can find the link to download that in the episode description.

How should I track my fleet expenses?

Okay, I know that sense of dread you're feeling right now. You have your spreadsheet open and it looks like a foreign language only spoken by bankers and your c-suite team. People in your 2024 Planning meeting are talking about v-lookups and pivot tables and you'd rather pivot away from the conversation.

I can just imagine my wife rolling her eyes right now.

But I get the frustration around budgets and spreadsheets, and I also want you to know how valuable these numbers can be for you.

The trick is that in order to see the value of these numbers, you need to break them down in a way that speaks your language.

Categorizing Your Fleet Expenses

What does that mean exactly? Well, we typically recommend breaking your fleet expenses down into individual categories so that you can figure out exactly where the money is going in your fleet. It's obviously different for each fleet operation but these are some of the categories we'd recommend for most fleets:

First, let's cover your vehicle expenses. For each vehicle, you should track the following:

  • Service Tasks - track the costs of keeping your vehicles running and categorize each service task as either a maintenance task or a repair. Also keep a line item for parts needed and the cost of labor
  • Fuel Expenses - what have you spent on fuel for each vehicle, it's also helpful to tie this to odometer readings so you can determine the fuel economy of your assets
  • Loan or Lease - if you have an ongoing fixed expense for an asset, that should be tied into the cost of operating a vehicle And then any other details that you can think of – insurance, tolls, parking, fines, you name it. The goal is to know every dollar that was spent to operate each vehicle this year.

Outside of vehicle expenses, you should also have a category for:

  • Employee Expenses - this includes salary, benefits, stipends, licenses and professional development opportunities
  • Software and Technology - if you're paying for a subscription that helps you improve your fleet processes, it's helpful to see how that cost ties into the larger picture
  • And then, as I said, each fleet has different needs and processes, so you should also leave a Miscellaneous category for any expenses that don't fall under your main expense categories.

Taking Steps to Reduce Your Fleet Expenses

Now that you have all your expenses categorized, comes the fun part. This is where you get to actually start analyzing what's happening in your fleet.

Finance people love numbers. Fleet managers love actions. And everybody loves a plan.

If you've categorized your expenses based on the categories above, here are a couple easy ways to measure your effectiveness and go into your 2024 Planning Meeting with a list of actions you want to take next year to make your fleet even better.

1. Maintenance vs. Repairs — Remember how I mentioned that you should break your service expenses into which service tasks were routine maintenance and which were due to needed repairs? Here's why:

Say that you're spending 80% of your time on repairs and only 20% of your time performing preventive maintenance. Now, I know that sometimes you can do everything right and a part will still fail. But if your Repairs to Maintenance is at 80/20, then you have room for improvement.

Set a goal in your planning meeting to increase your on-time maintenance rate by 10-20% and see if the cost of repairs decreases.

Suddenly, your vehicle expenses become more predictable and you're able to stay at- or under-budget for 2024.

2. Vehicle Replacement Analysis — Selecting the right vehicles for your fleet is a big, but entirely necessary decision. There are a few things you can look at when it comes to deciding which vehicles to retire and which vehicles to add to your fleet in 2024.

Run a report of your fleet vehicles by fuel economy. In this, you can see if any makes and models are performing better or worse than others.

Run a sum of each vehicles' expenses across your fleet. If you notice that a vehicle in your fleet is costing more money to operate than other, similar vehicles, then it's time to put a plan in place to retire it and replace it with a newer model.

And if you have access to the numbers, run a report to see how much time each fleet vehicle was downed for service or repairs this year. Vehicle downtime is one of the biggest expenses that many fleets face and they don't realize it, because it's not measured in dollars spent, but rather dollars lost due to the inability to do its job.

It's likely that a big part of your budget will need to be allocated to purchasing new vehicles, but it's a requirement to run your fleet. Don't be afraid to make the ask, especially if you have the numbers to back up your request.

3. Updating Your Budget Based on Past Performance — And the best way you can determine your ability to stick to a budget in the new year is to see what you've done this year. Now that you have all the costs added up from 2023, let's take a look back at the budget that was created this time last year.

You should be able to quickly analyze all of your fleet expenses by category and compare them to the budgets that you set out for yourself. Look into each line item and determine if you were able to stay under-budget, at-budget, or if you went over-budget.

Regardless of where you fall into this list, don't view this as a success or failure – it's just a fact. As we said, many fleet expenses are unavoidable and your expense report should be used to determine how much money to allocate in the new year. Instead of giving yourself a grade on your budget adherence, use this information to consistently improve yourself and your fleet.

If under-budget:

If you were able to stay under budget, determine if there's a way to increase your fleet expenses to improve your fleet operations.

Maybe you decide that you want to be even more proactive in maintenance so you step up your maintenance expenses to keep your vehicles from breaking down unexpectedly.

Or maybe there's a new hydraulic lift or vehicle diagnostic system that will enable your technicians to reduce the amount of time it takes to perform basic service on your vehicles.

Or maybe you've had your eye on that fancy fleet management software, [gesture to camera] this is a great time to figure out if you can add to your tech stack in the new year while sticking to the allocated budget that was given to you by leadership.

If at-budget:

If you were right at or around the budget you predicted, pat yourself on the back and then determine if you need to make adjustments to your budget based on the overall expense goals of the organization.

If the organization is trying to cut your budget in the new year, then you can use your expense history from the past year to make an argument for maintaining – or even increasing – your current budget. Or you can use your expense history to see if there is some room for you to trim costs without significantly impacting your fleet operations.

Or maybe your organization is giving you an even larger budget in the new year, then you can use the past year's expenses to determine where you'd like to increase spending - either in something you're currently doing or in something you'd like to add (or maybe you'd like to just give yourself some padding in case of an unplanned expense).

If over-budget:

And if you go over your budget, don't let that overwhelm you. It happens to the best of us.

By effectively tracking all of your fleet expenses, you can make a fact-based argument for why you went over budget and can determine whether the budget that you set aside was unreasonable or if there's something you need to change in your fleet processes to reduce the costs of operating your fleet.

Or if it's just a matter of fact that it costs more money to operate your fleet than anticipated, then maybe your organization can use that data to determine whether they are charging enough for their services and should increase the cost of their services to match the organizational operating costs.

Improving Fleet Operations

At the end of the day, I want to communicate to you that a budget is not just a gross finance spreadsheet that tells you what you're doing wrong.

By setting a budget and tracking all of your fleet expenses, you have greater control over your fleet operations and can also prove your effectiveness as a fleet manager.

A budget is a necessary part of managing a fleet, because it helps break that stigma that the fleet is just a cost burden. Yes, it costs money to run a fleet of vehicles, but your vehicles are an essential part of your organization's operations.

And a solid budget helps you prove that the costs of maintaining these vehicles is not in vain, rather it's essential and that you've created a fleet management system that enables your organization to get the most value out of their fleet expenses.

That's all that I have for today's episode of The Fleet Code.

But I do have a question for fleet managers out there with budgeting experience: what are some big budgeting wins that you've had in your career? Where have you found places to reduce your fleet costs? Send us an email at or leave a comment on our YouTube channel. Your answer could be featured on a future episode of The Fleet Code.

If you'd like to download our free White Paper on Fleet Budgeting – which is way more comprehensive and talks way slower than I do – you can find the link for that in the episode description. I've also included some other resources down there that you might find helpful.

As a reminder, The Fleet Code is brought to you by Fleetio. If you're looking for the best way to track all of your fleet expenses, Fleetio's fleet management system brings all of your fleet data into one system so you can run instant and detailed reports on each of your fleet assets. You can learn more about Fleetio at - that's

Make sure you subscribe to The Fleet Code on your podcast platform of choice to keep up with the latest tips and tricks for fleet managers. Leave a review or rating if you're into that kind of thing. If you have a topic that you'd like us to cover, send us an email to and let us know. Subscribe to our newsletter and follow at-fleetio on social media for even more fleet management best practices.

Takeaways from this episode:

  • The fleet is often viewed as a cost center. By adhering to your expense forecasts, you can set expectations around the costs affecting your fleet and reduce this stigma.
  • Categorizing your fleet expenses allows you to identify opportunities for improvement when it comes to budget adherence in 2024.
  • Being under-, at- or over-budget should not be viewed as a success or failure. Rather, i should be viewed as an opportunity to improve yourself and your fleet.
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