Consigned fuel can provide clarity to where your fuel goes. But is that truly helpful if you’re not sure what you’re paying for? Many fuel providers bill you consigned true-ups without breaking down each billing cycle’s inventory readings and the price of fuel deliveries into consignment.
However, you need full transparency so you can not only enjoy accurate cost allocations but also validate the prices you pay. Here’s why clear, detailed invoicing matters to your bottom line.
With Transparent Invoicing…
Expenses are Correctly Allocated
One key benefit of consigned fuel is that your fleet can fuel at multiple facilities without distorting your cost center accounting. Ideally, the fuel costs are assigned to the vehicle’s home distribution center. This approach makes your accounting team’s jobs easier as there’s less confusion about which transactions should be allocated where.
However, discrepancies in your fuel provider’s books make it challenging to accurately analyze and predict your fuel expense. The details from your consigned fuel provider should identify all of the following for full transparency:
- The vehicle and driver associated with each transaction
- The tank reading at the beginning and end of the billing period
- The price of both inventory deliveries and usage transactions
- The distribution center to which the costs were assigned
Detailed invoices allow you to audit for any discrepancies and gain a clearer picture of your fuel budget. At Diversified Energy, we bill each transaction to the vehicle’s domicile distribution center, allowing you to easily separate your books and analyze your complete inventory usage.
Drill Down into Transaction Details
Each invoice should list all the transactions for which you are billed. This way, you can verify that fuel-ups at each facility were correctly assigned to the appropriate entity. Even if your drivers made fueling transactions at multiple facilities, you should be able to review their transactions out of inventory, verify the purchase price, and allocate it to the right cost center.
You also need to see the price of deliveries into inventory. How much are you paying for your fuel purchase and what is the cost of each fuel-up? Do these prices match the pricing schedule in your fuel contract? Detailed, transparent invoicing can give you these valuable insights.
Diversified Energy provides an industry-leading web portal, myFuel, that lists all transactions on a detailed Tank Ledger. You can review all inventory readings, deliveries, and recorded transactions with their respective prices.
Ensure Full Compliance in Your Bookkeeping
Transparent invoicing supports overall transparency in your financial records. Per the Sarbanes-Oxley Act (SOX), publicly traded companies must validate the accuracy of the invoices they pay. Therefore, a consigned fuel provider that lacks details in its invoicing opens the door to misallocated expenses and inaccurate invoices.
Whether you’re facing an audit or preparing your quarterly budget, invoice transparency is crucial for validating your inventory quantities, transaction prices, and cost of distribution.
Conclusion
At Diversified Energy, we understand the importance of having accurate, detailed transaction records. They are vital to both your financial planning and compliance needs. Our transaction-based consigned fuel program and proprietary myFuel platform help you achieve greater cost efficiency, more accurate books, and better control of your fuel expenses.
