No credit? No problem

Fuel and corporate card programs are vital business tools. Using credit to delay payment of operating costs, especially fuel, accelerates cash flow and the card controls help keep spending in line with budget.

Since fuel and corporate card programs are so common, it might be easy to overlook new opportunities to improve current practices. Big Blue Trucking identified an opportunity to swap credit with debits to save money, improve spending controls and administrative efficiency.

Like most carriers, Big Blue Trucking in Warren, Ohio, issues fuel cards to drivers. Big Blue operates 65 trucks and hauls general bulk commodities. It also operates a 10-truck company, Prop Logistics, that picks up crude oil from domestic oilfields. photo1Its fuel card program gives a discount on pump prices and limits the amount and locations of fuel purchases. The company can also issue payroll advances to drivers through the card.

The fuel card program is working fine, but Heather Best saw room for improvement with Big Blue’s corporate card program. When credit card statements came across her desk they were filled with charges but no receipts.

Company officials were issued company credit cards. The cards were often passed to different departments, as needed. For example, an officer would let the maintenance department use a card to buy parts, or the IT department to buy a laptop.

In general, the credit card program lacked accountability, says Best, the company’s controller. In some cases the bank would cancel a card when it detected more than one person was signing for purchases. Cancellation would disrupt services such as the company’s E.Z. Pass account for toll roads until the bank issued a new card.

Big Blue Trucking decided to try a different approach in May, 2012, by using PEX Card. The prepaid expense card program does not use credit limits to manage corporate spending. Instead, the company can establish limits with a prepaid balance for each card, similar to how a debit cards work.

Each card has a prepaid balance, so a conversation must first take place internally before employees and officers can make a purchase. Users can also set up the PEX Card to receive automatic daily deposits to maintain a specified balance.

Big Blue Trucking gives PEX cards to mechanics, sales people and other office employees. The balance on the cards is reset daily to between $100 and $250 depending on an employee’s area of responsibility. If a larger purchase needs to be made, Best transfers the approved amount to the card. Larger amounts are sent through the company’s purchase order system for approval.

Employees assigned a card can make routine purchases without getting an approval but they still have to turn in receipts. The prepaid expense system has made everyone accountable for spending.

“Now we know who used (the card),” Best says. “If they don’t turn in a receipt, the advance comes out of their paycheck.”

Best manages the card service through a website as well as through a mobile app. The mobile app is convenient for adding money to an individual card if a purchase needs to be made during the weekend or after hours while she is out of the office.

The cost of the prepaid card program is a flat, monthly rate that starts at $7.50 per card. If a business spends more than $50,000 in a month, PEX Card waives the fee for all cards.

PEX Card is seeing some early success in the transportation industry, says Toffer Grant, the company’s chief executive. Any type of business that has a fleet can use PEX Card as either a primary or secondary card for ad-hoc purchases.

“It becomes one of two or three services that they seem to have.”