commercial invoice template for wholesale distributors

Only accurate invoices will ensure that the contract is being met. So while it’s great to negotiate a profitable contract, ultimately the contract terms are less important than what is actually paid. Margins – Fuel suppliers know they need to manage to tight margins. It also requires proactive monitoring of constantly changing tax regulations. Accurate invoice calculation requires many data inputs, from many sources, which often change daily or even multiple times a day. The fuel invoicing process is extremely complex. This creates a new type of complexity when determining tax on fuel invoices. In the case of the federal RFS 2 (Renewable Fuel Standard 2) regulations and RIN (Renewable Information Number) credits, suppliers are starting to provide invoice credits or rebates based on the value of the RINs they receive when they sell bio-fuels. Prices move more every day, and even during the day, creating additional opportunities for pricing errors.Īlternative Fuels – Governments are creating incentives and mandates to encourage greater usage of renewable fuels. Suppliers are creating complex contracts using multiple price indexes to more accurately mirror their costs and protect themselves from price swings. Swings of 5 cents or more rose from 1.6% of the time to 25%.3 Fuel price volatility is the new normal. Price Volatility – Since 2004, day-to-day fuel price swings of 3 cents or more rose from 6% of the time to nearly 50%. If a diverted load is delivered to another tax jurisdiction, such as across a county or state line, the tax treatment will be completely different from the original plan. The actual delivery may entail a volume change, product change, delivery time change, and/or a diversion to another site. This will cause the invoice, based on the original plan, to be in error. By 2013, the number of changes had increased to 523, a 106% increase.ĭelivery Diversions – Often errors occur when the actual fuel delivery doesn’t go according to plan.

In 2011, there were 254 separate fuel excise tax changes in the U.S. Lower fuel consumption levels are driving governments to look for creative solutions to replace declining fuel tax revenues. Tax Changes – The complexity of fuel tax is made worse by constant change. Any misunderstanding of these rules or rates will cause indirect tax errors, as will any error in capturing the correct fuel volume or price. Taxes will also vary based on the origin and destination locations, the transaction type, and whether buyers and sellers are licensed distributors. Each product type, including gas, diesel, and various blends, has a unique tax treatment in each jurisdiction. There are federal, state, county, and city taxes of multiple types, including sales, excise, and environmental taxes.

Indirect tax discrepancies are a major source of problems in particular. Getting accurate fuel volume, pricing, freight, sales tax, and excise tax together on a single invoice has always been a challenge. A supplier that generates bad invoices risks damage to hard-won customer loyalty and market reputation. But regardless of the reason, when a buyer discovers errors on their invoices, they will naturally lose trust in their supplier. In general, invoice inaccuracy is not born of malicious intent. Auditors can discover unpaid tax liabilities years later and require payment of accumulated taxes along with penalties and interest. The impact goes well beyond the gain or loss that occurs when an incorrect invoice is paid. By generating inaccurate invoices, fuel suppliers and distributors place their business at risk. 2 Fuel supplier invoices are often wrong, and sometimes very wrong. It is not uncommon to see error rates as high as 55%. Across the industry, invoices with errors of $15 or greater occur roughly 25% of the time. As recent headlines indicate 1, invoice accuracy is a fuel industry problem.

Commercial invoice template for wholesale distributors