When fueling your fleet, your top concern is managing your costs. Many fueling providers will nickel-and-dime their clients, raising costs and making it difficult to coordinate and optimize fuel allocation. At Diversified Energy Solutions, we strive to help your company maximize the use of your fueling infrastructure — while correctly allocating and invoicing fuel costs. This is possible with our Consigned Fuel program that sets us apart from many other providers. One of the top benefits of Diversified’s Consigned Fuel is our transparency, which makes things easier for both your accounting team and your regulatory compliance.
Our Tank Ledger Helps You Validate Consigned Fuel Invoices
The Consigned Fuel program’s transaction-based invoicing allows you to see the precise details of each vehicle fuel-up.
Diversified’s proprietary myFuel portal includes a detailed Tank Ledger that shows the inventory readings, recorded transactions, and deliveries into the tank. This gives you a complete portrait of cost variables. Your accounting team can easily see and validate how each invoice assigns costs to each vehicle in the fleet.
Even if drivers get fuel at different facilities within your footprint, all fueling transactions can be charged to their home distribution center. Our tank ledger will detail all of the fueling transactions from the tank, but we will invoice the vehicle’s domicile for the fuel and not the location where the fuel was dispensed. This allows your drivers the freedom to fuel at your bulk fuel tanks where costs are lower and ensures cost allocations are charged to the appropriate cost center.
This transparency sets our consigned fuel program apart from many others. With better price validation and cost analysis, you’re well on your way to optimizing your costs.
Clear Fueling Records Meet Compliance Needs
After Enron was caught hiding debts and losses in off-balance-sheet entities, Congress passed the Sarbanes-Oxley Act (SOX), which requires high accuracy and public disclosure of a company’s books. To comply with SOX’s requirements, publicly traded companies implemented audit policies to prove the validity of their invoices.
That can be challenging if your fueling provider does not properly document invoice elements. With our Consigned Fuel program and its detailed Tank Ledger, you can easily validate your expenses and pull transaction details for every fuel-up. There is no longer a need to worry about your books being inaccurate or having transactions fall through the cracks.
In addition to the tank ledger itself, DES provides a summary of the beginning inventory, deliveries that were made, recorded transactions, the ending booking inventory, and a true-up reconciling entry if applicable. Each element can be validated for both quantities and price.
Indeed, you can audit your expenses within the ledger, making it much simpler to implement SOX’s requirements for internal validation and strict accounting procedures.
Transaction-Based Fuel Invoicing Allows You To Align Expenses with Revenue
In truth, Consigned Fueling makes sense only in certain situations. The most common situation where Consigned Fueling works is where multiple profit or centers fuel from the same tank. A second situation where Consigned Fueling benefits you is where your revenue model is based upon mileage. Employing a consigned purchase model allows you to align your costs with your revenues by paying for fuel as you use it rather than as it is delivered to you.
The cost matching benefit of Consigned Fueling only works if your consigned invoices are delivered to you both timely and accurately. Some fuel providers can undo the benefits of consignment by habitually hitting you with “true-up” invoices long after your fiscal period has closed. Make sure to partner with a provider who can automate their consigned billing process and eliminate post-period surprises.
Conclusion
At Diversified Energy, we aim to help your company maintain a firm grasp on your fueling expenses and cost-efficiency. Plus, if you’re publicly traded, you can rest assured that you’ll have accurate, transparent accounting in case of an audit. Our Consigned Fuel program is designed to work with your business model and help you maximize profits.
Learn more about our Consigned Fuel solution and the myFuel portal.
