“Experienced fleet managers know that budgeting never stops. Preparation for the next cycle begins as soon as the current year is finalized, and changing circumstances, fuel price, higher crash rates, etc., often make the fleet budget a moving target,” Katherine Vigneau, CAFM, director of professional development for NAFA, said.
However, a well-planned structure will assist in developing budgets and making changes when needed. To that end, NAFA encourages fleet managers to follow these steps:
STEP ONE: Although the process never really stops, be prepared for the next year one to two months prior to the end of the current fiscal year.
STEP TWO: Put together a schedule of the organization’s planned activities for the coming year and identify their impact on the fleet budget.
STEP THREE: Determine available funds, including carryover balance from prior year, cash on hand, funds in the bank, etc.
STEP FOUR: Identify sources of income, if applicable, and estimate when it will come available. Including chargebacks to other departments for use of pool vehicles.
STEP FIVE: Identify expenses, both regular and periodic. Be sure to plan for events such as:
• Organizational activity, i.e., a higher level of service approved in snow clearance operations
• Fleet initiatives, i.e., the launch of new safety training program that drivers will complete in the spring
• Scheduled travel and training, i.e., NAFA I&E convention, supplier site visits
STEP SIX: Get price quotes for planned expenses, such as new vehicle acquisitions with updated model year information.
STEP SEVEN: Negotiate expenses as necessary.
STEP EIGHT: Submit initial budget recommendations. If you are proposing to include any new expenses in the budget, build a business case for this new expenditure. A strong case will include an examination of the return on investment with a payback period calculated. There is a better chance at approval if this can be directly tied to organizational objectives.
STEP NINE: Executive committee reviews submitted budgets, advises of any bottom-line changes that need to be made.
STEP TEN: Review and revise the budget, keeping intact budget for most critical expenditures, and trim back on less critical expenditures as needed. Submit the final budget to management.