Recent news articles have indicated that the current increase in fuel prices is a precursor to economic recovery. Thankfully, fuel prices are nowhere near last year’s peak prices. Remembering what last summer’s run up in fuel prices did to our customer base and our credit line, I am a little more wary. Not afraid to hope, but definitely settling in for a longer road to recovery.

When we did our Budget for 2009, we threw many darts and came up with numbers that looked “reasonable” given the current economic conditions. Reasonable volume numbers, reasonable labor costs, and reasonable expenses. We followed a long standing philosophy of being conservative – inflating expenses and minimizing gross profit. Given what happened the second half of 2008, we were VERY conservative.

Tomorrow, I will sit down with our company managers to review how we are doing this year. Look at key metrics used to judge our business and compare our budget numbers to our actual financials. In preparation for that meeting, I asked John, our controller, to do a mid-year modification on two items: fuel expense and credit card fees.

At first blush, we all feel great. We have over estimated the cost of fuel for this year, leaving us significantly under budget on fuel expense for our 30 trucks. In addition, credit card fees are a large expense at our retail locations and we used our fuel cost estimates as a basis for our budget. The problem is these line items were masking other areas where we are OVER budget. We can all agree, this is not the time to be OVER budget. So John is adjusting the numbers.

In all likelihood, we will miss the goal for May. But, it is important that we do not lose focus on what we set out to do this year:

1. Year to dig in, support our customers through a high level of service;
2. 2009 is a year to watch our expenses;
3. 2009 is a year to count our pennies;
4. 2009 is a year to look for the light at the other side. We are catching glimpses of it, but as the bankruptcy filling of General Motors reminds us, we are not out of the woods yet.

What are you doing this year?

Mary Fleet Manager Wall cost of fuel, credit card fees, economic recovery, Fuel Budgeting, fuel expense, fuel price increases