The owner is the person or organization held accountable for timely and accurate data updates to enable accurate invoicing. For example, one person may be responsible for researching and tracking fuel excise tax regulations across all jurisdictions. Another person may be responsible for sales tax rules and rates. Specific owners should be assigned for BOLs, contracts, price indexes, surcharge rates, and business partner tax certificates. Too often, data collection is handled as a one-time project, with no one assigned to ensure timely data updates after the invoice generation process is in place. Use commercial software or services instead of in-house or manual solutions.
Across the industry, invoices with errors of $15 or greater occur roughly 25% of the time. It is not uncommon to see error rates as high as 55%.2 Fuel supplier invoices are often wrong, and sometimes very wrong. By generating inaccurate invoices, fuel suppliers and distributors place their business at risk.
Suppliers are creating complex contracts using multiple price indexes to more accurately mirror their costs and protect themselves from price swings. Prices move more every day, and even during the day, creating additional opportunities for pricing errors. Delivery Diversions – Often errors occur when the actual fuel delivery doesn’t go according to plan.
In this case, change management stakeholders may need to meet and formally approve readiness. There are several organizations that have a stake in accurate invoicing, including sales, IT, fuel operations, tax accounting, and accounts receivable. A change management process should include documentation of the change implementation plan, and the opportunity for review and feedback by all stakeholders.
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The change process may entail sending email to stakeholders with the customer’s profile, contract details, and planned start date. The test plan is to review the first few customer invoices manually. There is no stakeholder preapproval required, but stakeholders can ask questions and hold the start date if needed.
While many suppliers have adopted some automation, error-prone manual or spreadsheet-based invoice calculation is still quite common. Gasoline retailing industry in the context of this article is referred as business of selling fuel to Gas station, oil and gas accounting or C-Store selling gas, or any other form of Fueling station. In this business activity, the fuel is bought from Fuel Refinery/Supplier/Wholesaler Terminal and delivered at Gas station. This does not cover selling fuel to the end customer.
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Use automation to test efficiently prior to production. Use the same inputs, and you’ll get the same outputs. With this in mind, use a test setup to validate new use cases and regression test old ones to make sure that critical tax scenarios work as they should. Some tax automation products provide specific functionality to make it easy to run test transactions without impacting production data. Track and review number of invoices pending for payment, ageing report, number of unconfirmed deliveries, unconfirmed EFTs and unbilled orders etc. at regular intervals. Having proper tracking ensures that issues are addressed in timely manner.
- Another related question is “how much to automate?
- By 2013, the number of changes had increased to 523, a 106% increase.
- Use commercial software or services instead of in-house or manual solutions.
- Using the strategies outlined here, savvy fuel suppliers are working to ensure indirect tax compliance and build a trust relationship with their buyers through accurate invoicing.
- By automation, I mean letting your systems perform functions without (or little) human interference.
- A change management process should include documentation of the change implementation plan, and the opportunity for review and feedback by all stakeholders.
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Using the strategies outlined here, savvy fuel suppliers are working to ensure indirect tax compliance and build a trust relationship with their buyers through accurate invoicing. A trust relationship results in lower costs, higher customer retention, and a positive market reputation. Tax determination software can provide automated rate and rule updates that will keep sales and excise tax systems up-to-date. This eliminates the need to monitor federal, state, county and municipal tax authorities for regulatory changes.