Managing the fuel adjustment factor with vWork

vWork is making it easier for transport operators to better manage fuel surcharges.

Calculating fuel costs and working them into invoices is a time-consuming process on a good day. These days however, with constantly changing fuel prices, which can include wild swings both up and down on a sometimes daily basis, it’s become an increasingly monumental task. The good news is that software-as-a-service company, vWork, can help to reduce the time and energy you spend on the fuel adjustment factor.

The fuel adjustment factor (FAF), also called variable fuel factor, fuel surcharge, and fuel levy is a percentage-based surcharge that lets you factor in variations in fuel costs without needing to adjust your base transportation rates. 

Many operators calculate FAF using a predetermined percentage and pass on some of the fuel costs to customers. This allows them to manage the variations in fuel costs caused by unpredictable factors such as dynamic fuel pricing and geopolitical uncertainty. 

With fuel prices often changing quickly in a short period, FAF offers operators flexibility and certainty by helping to recover fuel costs whilst also clearly identifying the rising cost of fuel on the invoices to their customers.

“Having to manually adjust fuel surcharges on invoices can eat up a lot of valuable time when you’re on the job,” said Sam Edmond, head of marketing at vWork. 

“Not only is it time-consuming to have to manage across multiple invoices on any given day, but it often takes employees away from helping customers.”

vWork customers get complete control over which invoice line items FAF applies to, ensuring the amount is accurately reflected in all invoicing, automatically. 

FAF can be enabled through the finance settings in vWork and, once enabled, there is an option to set the FAF rate percentage for transport line items. To use FAF for an individual template, is as easy as enabling invoicing for the template, adding line items, and then selecting the FAF checkbox for each line item that you want the FAF surcharge applied to.

FAF can also be applied to automatically generated line items, for hourly and mileage rates that apply to both users and equipment.

“What this does is it creates a way to automate the process, so you don’t have to manually calculate the surcharge on every invoice. You set the percentage and vWork handles everything else,” explained Edmond.

Like with any process, automating FAF in this way helps with a few things. First, employees are spending far less of their time doing paperwork. Rather than manual calculations, they enter a percentage into the account settings once and the calculating happens automatically. Not only does this make things happen faster, but it removes the risk of human error from the process, meaning you’re spending less time redoing invoices or on the phone with customers. All of this means you can focus on better serving your customers. 

FAF also helps your customers understand why the invoice this month is different from last month. The changing cost of fuel is clearly called out on the invoice and the base delivery rates are shown as unchanged. This ensures the end customer understands that as an operator you are not charging more for your services.

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