In an information-based economy, the decision to make a technology investment purchase can be complex and dictated by price. Financially, a firm would likely label the purchase as a business expense, as denoted on the income statement, rather than as an asset on the balance sheet.
Expenses are shown on the income statement for management to review the “bottom line” of the company.
The business expenses are subtracted from incoming revenues to show how much the organization earned (or lost) over the period. However, lasting benefits (such as future cost reductions) of a new technology is typically not taken into account when processing the original expense.
While the upfront costs may be accounted for, one must examine the intangible, future benefits of the technology. Utilizing fleet management solutions provides numerous paybacks to an organization. Acting as an intangible asset – one that adds value and economic benefit over time, the fleet management technology has a direct impact on the bottom line of a business.
Cost savings can be extracted from multiple areas. At Lynx Telematics, along with GeoTab technology, the savings have been identified as coming from 4 core pillars:
1. Fleet Optimization: This includes making the best use of all available assets, and optimizing driver management. In turn, cost savings can be realized from reduced fuel usage and greater MPG consumption.
2. Driver Safety Maximization: Through interactive driver training methods, drivers are constantly reminded of safe driving practices. For instance, buzzers will inform the driver to reduce their speed and/or put their seat belt on. Not only does this cut down on costs, but also it helps organizations reduce vehicle damage along with employee injury claims.
3. Enhancing Driver Productivity: Getting more done during the day leads to customer satisfaction and long-term loyalty. As such, organizations can reduce their churn rates and improve their gross profit margins.
4. Ensuring Compliance: For those organizations that operate inter-state, the value of being HOS compliant comes at no surprise as costly and damaging penalties can be avoided.
Re-Posted by Vincent Rush
Vincent Rush is VP of Business Development for Lynx Telematics, a full service telematics provider that not only supplies fleet managers with the tools and education to reduce their operating expenses by nearly $2500 per vehicle on an annual basis, but helps assist managers in increasing the overall CSA scores as well as managing their telematics projects to achieve maximum return on investment.
Vincent Rush is also a professional consultant and has run multiple businesses ventures and provided career coaching and mentoring to thousands of business professionals throughout the United States.
For more information on how Lynx Telematics can assist with operational challenges and escalating operational costs, contact Vincent Rush directly at Lynx Telematics (513) 702-0495 or firstname.lastname@example.org