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Trucking Companies Displaying Greater Concern about Fuel Invoicing

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At the end of 2013, FuelQuest conducted a fuel invoicing survey with over 80 different people from fleet-based companies, including both TL and LTL trucking companies, distribution companies, and manufacturers. The questions centered around the complexity of fuel invoicing and the commonality of invoicing errors, and what companies are doing or not doing to combat this. Most of the answers did not surprise us much. For example, when asked about the most difficult invoice challenges, 35% said that verifying the price for spot purchases was the most challenging, followed by 32% citing monitoring tax rule and rate changes as their biggest challenge. Just behind that, 23% identified comparing the invoice price to their fuel contacts as the most challenging.

 
However, some answers did surprise us, thankfully. Nearly 40% percent said that they are somewhat or very concerned about fuel invoices. Over 98% said they had discrepancies up to 25% of the time, 16% said they lost trust in a supplier, 16% said it increased operational costs, and 8% said it hurt their bottom line. Also telling is that over 38% of those that participated said that they plan on checking more invoices this year over last year.


So, in the end, we are glad to see a greater level of concern related to invoicing. We think in the past more people have accepted a certain amount of errors from their suppliers. Now, to be clear, we are not trying to throw suppliers under the bus here, as we have stated before, invoicing is hard! Our own Gary Davis, product manager here at FuelQuest, wrote a white paper on this subject, detailing the difficulties involved with fuel invoices. This includes factors such as highly volatile fuel prices, varying freight charges, and tax rates that are continually being updated or changed, not to mention different contract types tied to differing indices based on opening or closing price.


To give some background on this, our FuelQuest Fuel Center® Service manages over 800 million gallons per year for our customers. As part of our process, we negotiate with suppliers and carriers on behalf of the customer to get the best rates and establish contracts related to our RFP findings. In doing this, we have found error rates of roughly 1 in 4 at program outset which later settles down to about 1 in 10. Our biggest contribution is that we check every single invoice, every one. So, through diligence and communication we get the error rate down to roughly 1 in 10. Now think about this, an error rate of 1 in 10 would be incredible in any other industry. It’s hard to imagine accepting that 10% of your invoices are incorrect and not checking each one. Sure, some will be in your favor (under charge), but many will not (over charge). And if you don’t check them all, how will you know? You could be leaving extra cash on the table, or being undercharged for a time before the supplier notices something and sends you a BIG bill for the difference.


It is good to see that maybe now the industry has lost some of its tolerance for these errors, and viewing it as something that needs to be addressed. FirstGroup America is one example of a company that has concerns over fuel invoices and recently renewed their relationship with us primarily due to those reasons.


In summary, to protect your companies’ bottom line relative to this cost something needs to be done– whether it is bolstering internal processes, or adopting new technology or partnering with a provider to help in this area. It seems that now the industry at large is beginning to have this same view.


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