Australian Govlink Vol 1 2014 | Page 19

FLEET MANAGEMENT Excess charges These are such costs as excess accident insurance or those incurred from breaching lease contractual terms and conditions. If your organisation permits employees to use vehicles for personal use, including commuting to and from work, you may be required to pay Fringe Benefit Tax (FBT). FBT is levied at 20% of the FBT vehicle value for any new vehicle acquisitions. Personal use charges The organisation needs to clearly articulate its policy regarding the costs to be charged for employee personal use (if any). Amounts recovered through this process should be recognised in the whole of life cost calculation. Fair wear and tear and excess kilometre or time charges You need to assess the likelihood of incurring these charges. If you have been liable for these in the past, it’s quite likely that they will be incurred in the future, so include a factor for anticipated excess charges. The bottom line To see the total costs of vehicle ownership simply add the fixed costs and operating costs together. It is sometimes useful to break the total lifecycle cost into kilometres. This provides a common way by which you can benchmark your fleet against other organisations. To determine the cents per kilometre costs take the Estimated Lifecycle cost divided by the total lifetime kilometres travelled. Ken Thompson Director of Research & Communications, AfMA Ken has a background in telecommunications and Project Management in both Europe and Australia. He holds a master in Innovation and Service Management, a degree in Management Studies, a Company Directors Diploma and is a fellow of the Australian Institute of Company Directors. Ken’s role is to analysis the Automotive and Fleet Industries and formulate policies and submissions to protect the Association members’ interests. Ken also represents AfMA at State and Federal Government hearings. The Australasian Fleet Management Association (AfMA) is a not-for-profit organisation with over 600 members throughout Australia and New Zealand. AfMA’s membership base is represented across all industries and levels of government and is responsible for the management of approximately 800,000 fleet vehicles. Our charter is to enhance Fleet Management as a profession in its own right, to provide knowledge, information and resources to our Members and to lobby and advocate on behalf of the fleet industry. Members have access to resources and a network of industry professionals to assist them in the strategic and operational management of their fleet. In summary There is no reason why the fleet should be managed differently than any other company function. Doing it right can reduce your cost substantially. Taking an out of sight out of mind approach and leaving the fleet cost in the dark is not recommended and can end up as a very expensive error. Govlink I Issue 1 2014 15