Today we're going to take a look at transportation fuel receipts. You'll discover important responsibilities for drivers and office personnel alike. Ultimately, it's important that you understand this part of the business. After all, fuel is something you'll always need!
You're going to come away with the answers to some very important questions.
I'll begin by addressing the question of whether drivers should keep fuel receipts. As I'm sure you can tell by the heading, the answer is yes. There are a variety of reasons for this. Drivers will want to keep their receipts in order to be reimbursed if necessary. Additionally, you'll find lots of other important information on those receipts you're keeping. Take a look at the example below.
Let's work our way down from the top.
First, you'll see where the fuel was purchased, the important detail is the city and state of the purchase. This'll be vital when you do your fuel tax reporting, also known as IFTA.
Next is the number of gallons purchased. Another detail you'll find is the date of purchase. You'll need both of these details for IFTA reporting as well.
Finally, you'll see the total purchase price of the fuel, as well as the method of purchase. The latter will help us determine what comes next.
If you're a driver, you need to know if you'll be reimbursed for a fuel purchase. If you work in the office, you need to know when reimbursement is necessary. So, should drivers be reimbursed?
The honest answer is: It depends.
There are a couple of factors to consider. Among these are if the driver is a company employee or an owner-operator. Also, you'll need to look at the method of payment for the fuel.
First, is your driver an owner-operator or a company driver? Company drivers are entitled to reimbursement for any business-related out-of-pocket expenses. For example, let's say your company driver makes a $50 fuel purchase with their own cash or credit card. As a business owner, you're required to reimburse the driver that $50.
Conversely, owner-operators are essentially owners of their own small businesses. Though they drive for the company, fuel purchases are their responsibility. They own the equipment that the fuel is being used for.
I'm merely addressing the industry standard. You may choose to handle owner-operators differently.
Next, let's look at method of payment. We've clarified that company drivers are entitled to reimbursements. However, the operative terminology from above is "out-of-pocket" expenses. You'll find that many businesses will provide a company driver with a company-issued fuel card. These cards often include discounts on fuel prices. Furthermore, they prevent the need to later reimburse a driver.
Fuel is one of the biggest expenses in transportation and logistics. How can you lessen these costs? Obviously, the price of oil is always fluctuating. Fuel is one of the most dynamic costs in the industry. However, you'll be happy to learn you have a number of ways to help mitigate this fluctuation. Business owners and drivers both have an important role to play.
I've mentioned that drivers should be keeping their fuel receipts. Typically, this would lead to the receipts coming back to the office to be filed away for IFTA reporting. The most efficient way for drivers to do this is with a trip cost report or trip envelope. Drivers can place each receipt into one of these envelopes as they acquire them. You can then go through the envelope and go through each receipt. From there, you can manually process any reimbursements as well as log data for IFTA reporting.
However, as with many other facets of the industry today, there's a better way. Electronic filing and mobile capture allow you to simply snap an image of a receipt to log it. The advent of digital workflow allows for an easy way of collecting all fuel receipts in one place. Furthermore, it's easy to find and sort them.
The benefits of mobile capture extend to drivers. Rather than a trip envelope filled with crinkled receipts to return, they can simply process everything on their phones. You're ultimately making life easier for all ends of your business by storing as many documents digitally when you can. It's even possible to digitize crumpled or torn receipts.
Everyone in your business plays a role in tracking and controlling fuel. Drivers are on the front lines, handling the equipment and collecting the data. Office workers are processing the data and helping drivers make decisions. Fuel consumption and awareness is paramount to the success or failure of your business. It all begins with the fuel receipts collected by drivers on the road, and reimbursing the drivers that need it. Tracking fuel costs and the amount of fuel used can help you determine your profitability.
Once you've acquired all the data, it's up to you to decide what to do with it. In an ever-changing economy, fuel remains one of the most dynamic costs in all of transportation and logistics. You should take every step you can to minimize your fuel costs. Just as with receipt collection, it requires cooperation from both drivers and office workers.
Finally, everyone on your team can help with the tracking of those receipts once they're collected. This may mean paper receipts being properly secured and filed. Alternatively, you've upgrade to digital, and drivers are taking images that office employees can then properly sort and log.
To get your best results, push and embrace teamwork across the board. Everyone working together will bring you tremendous success.