Jobber invoices: what your fuel really cost

On this page

1. Know your deal first
2. The lines on a typical invoice
3. Work out the all-in cost per gallon
4. Short deliveries raise your real cost
5. An invoice checklist
6. Drafts, card batches and the running account
7. What your fuel really cost

At a station that sells a lot of fuel, the jobber invoice is often the biggest bill in the building. It is also one that often goes unread. The draft comes out of the bank a few days after the drop, and unless the amount looks way off, nobody checks the lines.

This article covers how to read one, how to turn it into a real cost per gallon, and how to check it against what actually happened at your store. The figures in the examples are made up.

Know your deal first

How you buy fuel decides what you check.

• Cost plus. You pay the jobber’s cost at the terminal (the rack price), an agreed markup, freight and taxes. The invoice is your cost, so checking it matters most.
• Branded supply. You buy a brand’s fuel through the jobber under a supply agreement, priced by a formula in that agreement. Card sales often settle through the brand’s network and come back to you through the jobber.
• Commission, also called consignment. The jobber owns the fuel in your tanks and sets the street price. You earn a set amount per gallon sold. Your job is making sure the gallons on the commission statement match what your pumps sold.

The rest of this article assumes you own the fuel.

The lines on a typical invoice

Layouts differ, but most jobber invoices carry the same pieces:

• Bill of lading number. Ties the invoice to the terminal ticket for that load.
• Lift date and delivery date. When the fuel was loaded at the terminal, and when it went into your tanks. Many cost-plus deals price on the lift date.
• Grade and gallons. One line per grade. Check whether the gallons are gross or net (corrected for temperature).
• Product price per gallon.
• Freight, per gallon or per load.
• Taxes and fees. Federal excise tax, state excise tax, and other state or local fees. In some states a prepaid sales tax shows up here too.
• Total and due date, or the date the jobber will draft your bank account.

Work out the all-in cost per gallon

All-in cost per gallon = everything billed for the grade divided by gallons billed for that grade

Worked example

Say a load of 8,000 gallons of regular is billed like this:

• Product: 8,000 gallons at $2.30 is $18,400
• Freight: 8,000 gallons at 4 cents is $320
• Taxes and fees, every line added up: 8,000 gallons at 52 cents is $4,160
• Total: $22,880
• All-in cost: $22,880 divided by 8,000 gallons is $2.86 a gallon

Your margin math starts from $2.86. The $2.30 product price is only part of the story.

If one truck brings several grades and the invoice shows a single freight charge, divide the freight by total gallons and add that amount per gallon to each grade.

Short deliveries raise your real cost

Now say your own before and after tank readings show only 7,950 gallons made it into the tank, while the invoice charges for 8,000.

Your real cost for each gallon in the tank is $22,880 divided by 7,950, or about $2.878. That is almost 2 cents a gallon more than the invoice says, on every gallon from that load. The delivery check and the invoice check belong together for exactly this reason.

An invoice checklist

Run these on every invoice, before the draft date when you can:

1. Gallons match the delivery ticket, and the ticket matches your own tank readings within your normal range.
2. Each grade was billed as the grade you received.
3. The product price matches your deal. If you pay rack plus a markup, ask the jobber which rack and which day they price from, and spot-check a few invoices against the price notices they send.
4. Freight matches the agreed rate.
5. Tax lines use your state’s current rates. Rates change from time to time, so look closely at the first invoice after a change.
6. No load is billed twice. Same bill of lading, same gallons, two invoices: call the same day.
7. The amount drafted from your bank matches the invoice total.
8. Credits you were promised for a short or bad load show up on a later statement. Keep a list until each one does.

Drafts, card batches and the running account

Many jobbers don’t wait for a check. They draft your bank account a set number of days after each delivery.

If you are branded, the jobber may also settle your card sales. Your account with the jobber then works like a running balance:

• Fuel purchases are charges.
• Card batches from the network are credits.
• The network’s fees are charged against those batches.
• The draft pulls the difference from your bank.

That makes the statement harder to read, so check it in pieces:

• Fuel purchases: each one ties to an invoice and a delivery.
• Card batches: each one ties to a batch closed at your register.
• Fees: compare them with your agreement.
• Drafts: each one covers a set of purchases and batches, and the amount pulled matches the statement.

Worked example: one week on the account

Say in one week you take two loads, billed at $22,880 and $11,600, and the network settles $30,500 of card sales through the jobber, with $640 in fees.

• Fuel purchases: $34,480
• Card batches: $30,500
• Fees: $640
• Net owed: $34,480 minus $30,500 plus $640 is $4,620

If the jobber drafts $4,620, the week balances. If the draft is different, one of those lines is off, and you know which papers to pull.

Keep a simple monthly summary: purchases, batches, fees, what has been drafted and what has not been drafted yet. By the end of the month, every line should be accounted for.

What your fuel really cost

Put it together, one load at a time:

1. Start with the all-in invoice cost per gallon.
2. Adjust for any gallons you paid for but did not receive.
3. Blend that cost with the fuel already in the tank to get the cost of each gallon you sell.
4. On the selling side, take card fees off. They are a cost of selling fuel even though they never appear on the invoice.

Do it for every load and your margin report starts to agree with your bank account.

In Advantage, each delivery is recorded with the driver’s slip scanned and attached, and Jobber Management shows the month’s fuel purchases, card network batches, fees and drafts side by side, split into drafted and not yet drafted. Fuel Margins then works from each tank’s weighted average cost.