The ABCs of efficient invoice processing for fleets
If there is a fleet, there is sure to be invoices and invoice management. Manual invoice processing is time consuming and laborious: to ensure expenditures are entered correctly and assigned to the right cost centers. This also happens to be where many mistakes are made.
In this post, we will explain the kinds of errors that are inadvertently made during manual invoice entry and what solutions are available for efficient invoice management.
Fleet expenditures – from costs per kilometer to TCO
The fleet is part of a company’s fixed assets, provided that the vehicles have been purchased by the company. If leased vehicles are also utilized, they remain the responsibility of the lessor. Leasing premiums, in any case, are part of a company’s operating expenses. A fleet is encumbered by various types of expenditures. These are mainly:
- Staffing costs
- Fuel costs
- Tires, spare parts, repair and maintenance costs as well as external services
- Garage and parking space rental, office and recreation room rental, repair and carwash facilities
- Vehicle taxes, insurance, TV and radio license fees, registration and deregistration charges
- Depreciation and leasing rates, etc.
As part of cost accounting, fleet expenditures in the form of key figures are recorded at cost centers and forwarded to other cost centers or cost units. Fleet performance data is recorded using various means like logbooks, fuel statements, or by filling out timesheets.
The most common errors made in manual invoice processing
NManual receipt entry is time-consuming, as numerous details and other information have to be recorded. This is true whether you are entering fueling or managing invoices. For instance, irregularities in the amount of fuel pumped and the resulting incorrect mileage recorded, or invoices being entered twice or not at all, leading to unreliable cost calculation.
When fuel receipts are recorded manually, usage information or meter readings can get lost in the process. In addition, it is difficult to check plausibility (e.g., deviations in fuel quantity compared to gas tank volume) or compare data with contract terms. It also gets complicated when annual charges, such as vehicle taxes or insurance premiums, are to be periodized according to performance. What’s more, all this information is difficult to reconstruct from memory, so that period-based cost analyses or TCO evaluations are not possible.
Fleet management software makes invoice processing easy
With a fleet management software that includes automated invoice processing and a direct link to accounting, invoices can be quickly and efficiently processed while costs are assigned to the appropriate cost centers and periods, where they are analyzed.
Implementation of an accounting interface can be carried out in different stages. We will briefly go over the steps of this implementation:
Step 1: Digital invoice processing with export function
Setting up an export function for collective invoicing to be automatically processed in the fleet software is the simplest option. To this end, monthly digital invoice files from, e.g., leasing or fuel station companies are automatically entered, processed and forwarded to the accounting department.
In the course of invoice processing, plausibility checks are performed and missing information is filled in. This step ensures consumption information is stored at the vehicle level in the fleet management software, and available for evaluation. Programming interfaces (APIs), systems such as SAP, DATEV and Diamant, can be specifically addressed and supplied with the accounting entries.
Step 2: Integrating the fleet software into the workflow
An OCR scanner may be used to read analog incoming invoices, i.e., paper invoices, and the data records generated, including scanned documents, are forwarded to the fleet management system. Once there, invoices are stored as read-only PDF or TIF files in a digital archive or saved as a link in another archive.
The fleet as an accounting subledger
Caution is required when fleet invoice entry functions as a subledger of accounting. Subledger accounting represents an organizational spin-off of subsections of general ledger accounting, where certain general ledger accounts are explained in more detail.
Companies using a cloud solution or service provider to enter invoices should check where the invoices are processed and archived. Transfering electronic accounting abroad requires an application made to the tax office and is only possible if the country has concluded a double taxation agreement (DTA) with Germany. The requirements are rather high, and special attention must be paid to ensure that taxation bases are checked by the German tax authorities.
Advantages of having accounting integration in the fleet management software
Integration of automated invoice entry and processing enables:
- reduces manual efforts and risk of errors due to multiple entries
- costs posted to the activity period according to the cost center
- that a digital archive serves as a central document repository
- comprehensive controlling with a wide range of vehicle-related KPIs and analyses
Bottomline: A fleet solution for automated invoice processing including contract control and forecasts
A core component of our fleet management software Fleet+ is automated invoice processing, including document storage in a dedicated archive. The software solution’s basic version provides import interfaces to leasing companies and fuel companies free of charge. Toll and insurance fee import may be added on.
Many invoices include the vehicles’ operating statuses – Fleet+ records them, generates period/mileage forecasts and compares them against the parameters of the leasing contracts. At the touch of a button, the user is informed by a RAG indicator of contractual overruns or underruns of leasing contracts, thereby ensuring complete cost transparency.
Calculation of annual forecasts is done in a flash. Cost forecasts may be used to calculate the ideal time to replace vehicles, allowing cost-intensive purchases to be scheduled in line with the budget. In addition, annual costs can be periodized in Fleet+ and submitted monthly as a posting record to accounting. The powerful reporting module runs through the entire program and evaluates any fleet costs of your choosing. This allows you to quickly identify outliers and cost factors, and take sensible measures to benefit your entire fleet.