Fuel is one of the costs a shred company can't control and can't easily pass on mid-contract. A fuel surcharge is a separate line on the invoice that rises and falls with fuel prices, so your base price can stay steady.
Percentage or flat amount?
- Percentage of the service total: scales with the size of the job and is the most common approach
- Flat amount per stop: simple to explain, and fairer when small stops cost as much to drive to as big ones
Setting the rate
- 1Pick a published fuel price index to follow, such as the U.S. Energy Information Administration's weekly diesel price for your region.
- 2Set a base fuel price that's built into your normal rates. Below it, there's no surcharge.
- 3Decide how much the surcharge rises for each step above the base, and write the table down.
- 4Review it on a fixed schedule, monthly or quarterly, not whenever you feel like it.
Explaining it to clients
- Put the fuel surcharge in your service agreement from the start
- Show it as its own line on every invoice, labeled clearly
- Tell clients in advance when the rate changes, and why
- Decide which accounts are exempt, such as contracts with a fixed all-in price, and record it
Taxes
Whether sales tax applies to a fuel surcharge depends on your state. Ask your accountant.
How Trakro handles it
Set your fuel surcharge percentage once in Trakro's pricing settings and switch it off for any exempt customer. Quotes and invoices apply it automatically. When fuel prices move, update the percentage in one place.
Let Trakro handle the paperwork.
Certificates, chain of custody and invoices, built from every stop.