Manage Fuel Adjustment Factor with vWork

vWork enables transport operators to better manage fuel surcharges.

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

The Fuel Adjustment Factor (FAF), also known as Variable Fuel Factor, Fuel Surcharge, and Fuel Charge, is a percentage-based surcharge that allows you to account for variations in fuel costs without

need to adjust your base freight rates.

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

With fuel prices often changing rapidly over a short period of time, FAF offers operators flexibility and certainty by helping to recover fuel costs while clearly identifying the fuel cost increase on invoices to their customers.

“Having to manually adjust fuel surcharges on invoices can take up a lot of valuable time when you’re at work,” said Sam Edmond, chief marketing officer at vWork.

“Not only is it time consuming to have to deal with multiple invoices each day, but it often prevents employees from helping customers.”

vWork customers have full control over which invoice line items the FAF applies to, ensuring the amount is accurately reflected in all invoices, automatically.

FAF can be enabled through the financial settings in vWork and once enabled there is an option to set the FAF rate percentage for transmission line items. To use FAF for an individual template, simply enable billing for the template, add line items, and then check the FAF box for each line item you want to apply the FAF surcharge to.

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

“It creates a way to automate the process, so you don’t have to manually calculate the surcharge on each invoice. You set the percentage and vWork takes care of everything else,” says Edmond.

As with any process, automating the FAF in this way helps with several things. First, employees spend a lot less time doing paperwork. Rather than manual calculations, they enter a percentage once in the account settings and the calculation is done automatically. Not only does this speed things up, but it removes the risk of human error from the process, meaning you spend less time re-doing 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 this month’s invoice is different from last month’s. The fuel cost evolution is clearly indicated on the invoice and the basic delivery rates are indicated as unchanged. This ensures that the end customer understands that as an operator you are not charging more for your services.

Eleanor C. William