Fuel fraud is an often overlooked risk when it comes to a business’ bottom line. To avoid fuel fraud, you should look at what it is, how it happens, and what you can do to protect yourself.
What Is Fuel Fraud?
Fuel fraud is a practice that dishonest employees partake in. For example, if your company uses a fleet for its daily operations, your drivers may irresponsibly fuel your vehicles or falsify fuel expenses. You may also fall victim to criminal activity that steals and uses your company fuel card information.
The most common practice that occurs is the misuse of a company fuel card by an employee. This scenario often has the employee using the card for personal reasons and then submitting falsified information to obtain reimbursement for unpurchased fuel.
Card information may even be stolen through the use of card-skimming technology, so it’s best to practice safe card use at fuel pumps.
How Does Fuel Fraud Affect Your Business?
The most obvious consequence of fuel fraud is the significant negative impact it can have on your bottom line. Up to a potential 60% loss in your fleet’s operational budget can occur when unauthorized fuel purchases are made. This can lead to a massive increase in overall expenses and put you at a severe disadvantage over competitors.
Misuse of fuel can also result in disruptions across your daily operations. Employees who use fuel for unauthorized purposes can cause delays, increased downtime, and lower productivity. Your customers can have a negative outlook on your business as a result and will create issues for future business.
How To Avoid Fuel Fraud
One of the best methods you can employ to avoid fuel fraud is to create a strict enforcement procedure to ensure fuel is used correctly. A transparent enforcement plan can educate and inform your employees on proper fuel usage and any consequences that may occur. Any offenders should be disciplined thoroughly to ensure future actions are dissuaded.
You may also conduct audits and inspections to ensure your fuel is used correctly and efficiently. We recommend hiring a third party company such as Watchdog Management Services to conduct your internal audits to avoid any biases or conflicts of interest.
It would also be worth investing in fuel management technologies and employee training programs to maximize your fuel usage.
Conclusion
While fuel fraud can be a major headache for you and your business operations, it is not unavoidable. We hope that you learned something new about fuel fraud and how you can take the necessary steps to deter it.
For more information on how Watchdog Management Services can help you save on costs, be sure to visit our other articles or get in touch with us today!
