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Fleet Management Creates Opportunities To Tune Your Balance Sheet


While managing cash flow is often the greatest challenge when you are starting, managing your balance sheet will become more critical over time, the less capital you have to tie up in your vehicle fleet means the more capital you can deploy somewhere else where it will have a greater impact on growing your business. One way of managing this strategically is to employee a fleet management company that can help you not only manage vehicle life cycles but also deploy the best leasing options that fit your individual business requirements.

 

One of the advantages of using a fleet management firm is that you can hand off responsibility for vehicle maintenance to them by opting for a fully maintained lease or you can choose to do it yourself. The flexibility to tailor the options to fit the individual needs of your business are there for you to take advantage of. You can also tailor the leases to fit your businesses financial needs. This could be an operating lease where all the vehicles are held off balance sheet and can simply be returned at the end of the lease or maye you see an advantage of using a financing lease that gives you the possibility of ownership at the end of the lease.

 

Since fleet management companies tend to purchase large numbers of vehicles every year they are able to leverage that volume into better prices from the vehicle manufacturers then you could ever hope to get as a fleet owner. Because they start with a lower cost base they are able to offer you much better cost structures than you would be able to get on your own. They can also offer you much greater flexibility, you may find that you only need certain vehicles for one or two years a short term lease may be just what you need to make sure your fleet matches your commitments to your customers.

 

Choosing to lease rather than purchase can also offer you significant tax advantages by being able to expense a large part of your vehicle costs rather than funding it through the capital account. You will find in most cases that you are much better off expensing your costs rather than using depreciation to write off your investment. Different types of leases attract different tax treatment so e sure to explore which option will give you the most advantage.

 

In the highly competitive marketplace that is modern business it makes eminent business sense to concentrate on the things where you can deliver the most value added. You buy software as a service rather than trying to write your own so it makes perfect sense to treat transportation as a service and farm it out to someone who will deliver it conscientiously and allow you to concentrate on things that will add greater value to your customers. By concentrating on your core offering and delegating the non core functions you will grow your business much faster.