Pleasantly surprised. That describes how Raymond Leenhouwers, Controller at Franke, felt when he was able to examine the results of the vehicle expense analysis. Expense Reduction Analysts demonstrated that it would be markedly less expensive to lease company vehicles on a point forward basis. In addition, leasing through fleet bundling seemed to provide extra advantages. The total savings were 18%!
Franke Nederland B.V., a subsidiary of Swiss Franke Kitchen Systems, is a specialist in the area of stainless steel quality products for kitchens. They cater to the professional and consumer market. The company in Helmond manufactures and supplies sinks, taps, cooker hoods, waste systems, kitchen countertops and customised items. The chief impelling force therein is to combine high-quality technology, craftsmanship and design, so that perfection can be attained, or, in other words ‚a visibly higher class’.
Due to the large amounts of capital, Franke already had its doubts about the previous choice for ownership of ‚company vehicles‘. It was discovered that the costs pertaining to leasing and purchasing were closer than previously estimated. When Frits Gösgens, Expense Reduction Analysts consultant, proposed to the company that savings could be realised, on a “no savings, no fee” basis, the company decided that the Vehicle Fleet category should be scrutinised.
A condition for collaboration was that a small amount of internal support would be needed in a project, because, due to the SAP implementation, there were no internal resources left. Gösgens was able to provide a quick insight into the efficient working method of Expense Reduction Analysts, by way of a pre-audit. Subsequently, he was awarded the contract and called in fleet specialist Henk Postmus to proceed with the question: purchase or lease?
The vehicle fleet comprised 27 vehicles. In consultation with Chief Accountant Henk de Leest, Postmus was able to analyse the existing situation. He then compared the costs involved in driving company-owned vehicles, to those involved with leasing.
In this regard, the depreciation methodology for company-owned vehicles was an extra point for attention. Postmus explains: ‘Fiscally, each vehicle must be depreciated over a 5-year period, whilst in reality, vehicles are driven for longer than that. That implies that I had to adjust the depreciation factor for vehicles to reflect the total lifespan, and the accompanying interest calculation. In conjunction with maintenance figures, insurance premiums and taxes, this provided the overall outline of costs, per vehicle, for the particular period.’
In the investigation for suitable lease options, Postmus included the relatively small vehicle fleet of Franke in his methodology of fleet bundling. In this way, he is still able to achieve individual competitive prices for multiple clients with small vehicle fleets. This is obviously always based on the conditions and demands of the client.
"Something that really caught my attention during our collaboration with Expense Reduction Analysts was the thorough working method of the consultants. They even took responsibility for some of our work. This gave us a good feeling already, whilst the project was being carried out."
Raymond Leenhouwers, Controller at Franke