If you were to survey the universe of fuel buyers for their most frustrating facet of buying fuel, two things would rise to the surface. First on the list would be delivery related. This stands to reason that the successful delivery of the promised product would carry the most weight.

The second greatest frustration to buyers comes from a rather surprising source. Invoicing issues are the second most irritating issue fuel buyers face is the timeliness and accuracy of invoices. In fact, several firms exist in the fuel logistics space whose sole purpose is to ensure the accuracy of invoices and promote timely invoicing.

Take a moment to understand the implications of this statement. Fuel customers have proven themselves willing to pay third parties, such as FuelQuest or PDI, in large part to verify the accuracy of their fuel invoices. This is not to impugn the fine work these company do. However, what does their success in the market suggest about the fuel logistics industry? Clearly, the industry has more work to do.

What is it that makes billing issues so infuriating? There are several reasons fuel buyers detest billings issues so passionately.

Billing Issues Are Costly

There are several steps in processing a fuel invoice.  First, the invoice is received by either the transportation staff or the accounts payable team. Second, the invoice is then matched to the Bill of Lading and Driver’s Manifest. Next, the invoice is input into the payables system. The invoice is then placed in the account payables process and ultimately paid.

Each step in this process has a potential for error. Perhaps your transportation team notices that the billed gallons have been transposed because the fuel vendor relies heavily on manual inputs.  Possibly the payables clerk notices that the date of delivery on the invoice does not match the date on the Bill of Lading. This means the invoice price is wrong and means the invoiced total is wrong.

Inaccurate invoices do not flow easily through the controls your company has set. Rather than processing a single accurate invoice, your team must stop the invoice process and contact your fuel vendor who must issue a credit against the original invoice and a final corrected invoice.

The net result is one inaccurate invoice costs you at least three times as much to process than a single accurate one. That comparison assumes no follow up actions are needed with the fuel vendor which would be more costs for you to bear.

Inaccurate fuel suppliers consume your internal resources. Time spent correcting their work causes work for your staff. This increased workload is not free to your organization. Your fuel vendor’s mistakes are costly.

Billing Issues Are Disruptive

Fuel vendor’s woes can be disruptive to your processes. Their limitations rudely interject themselves into what you would hope to achieve. Let us explore two examples where fuel suppliers’ inabilities disturb your plans.

First, consider the normal monthly accounting process. You would like to close your books. Since fuel is a top expense item for you, you would like to close your accounting period using the most accurate information available. Rather than accrue an estimate, your strong preference would be to book the actual fuel expenses for the period. You would like to do those things, but you cannot. Why? Your fuel vendor still has not invoiced you for deliveries made two weeks ago.

Fuel vendors who are sluggish in their invoice process have undue influence over your ability to close your books. You need to quickly report accurate financial statements to your stakeholders.  However, the fuel vendor’s billing delays are disruptive to your desired accounting timeline.

A second disruption can be the untimely surprises that some fuel vendors drop onto their customers. An example one fuel buyer shared with Diversified was that their vendor would come to them with fueling transactions that were made months ago but were somehow missed by the provider’s invoicing process.  Another example given to Diversified was from a prospective Consigned Fueling customer. Their existing fuel consigned fuel supplier could go months before issuing corrections to consigned invoices.

If your fuel supplier waits months to invoice you, then there is a strong likelihood that the invoices in question are in prior periods for you. Your posted financials are now erroneous. They are incorrect because of your fuel supplier’s ineffectiveness in accounting for fueling transactions or in timely reconciling consigned fuel tanks. Prior period adjustments now disrupt your otherwise closed financials.

Billing Issues Erode Trust

The most damning legacy of a fuel vendor with billing issues is the eroding of trust. Customers with inaccurate vendors wait for the inevitable error shoe to drop. They must apply greater scrutiny to all of the fuel provider’s invoices because they understand the vendor cannot be trusted to be accurate. They wonder if their scrutiny is a function of incompetence on the part of the vendor or perhaps something more sinister. Consistent billing issues erode trust.

Do your fuel supplier’s billing issues continue to impact your organization? Does their incompetence cost you money? Are tired of wondering if your fuel supplier is just inept or immoral? Let Diversified Energy Supply show you how we strive to make our invoicing timely and accurate.

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