Courier invoicing
and the fuel levy.

Why invoicing is the night job

Ask the owner of a three-vehicle courier business when they do their invoicing and the answer is usually the same: after dinner. The driving is done by five, the phone finally stops, and what is left is a pile of run sheets, a few texts about jobs that were added on the fly, and a spreadsheet that has to agree with all of it before anything can be billed.

The work itself is not hard. It is the gathering that costs the hours. Every job has to be found, priced against the right customer’s rate, checked against what was actually delivered, and typed into whatever creates the invoice. Miss one and it is revenue you never see. Double one and it is a phone call you do not want.

This guide covers the two things that decide whether that evening is twenty minutes or two hours: how the invoices are built, and how the fuel levy is handled.

What a courier invoice needs

A customer’s accounts person will pay a courier invoice quickly when it answers their questions before they ask them. For each job that means the date, the pickup and delivery addresses, a reference they recognise (their consignment number or purchase order), what was moved, and the price. For the invoice as a whole it means your ABN, the period it covers, the total before and after GST, and the fuel levy shown as its own line rather than hidden in the freight price.

Showing the levy separately matters more than it looks. It makes the freight rate stable from month to month, which is what customers compare, and it lets the levy move with the fuel price without anyone feeling the rate has crept up. An invoice that shows the levy on its own line also rarely gets queried, because the number has an obvious reason.

Daily or monthly?

Most small operators invoice one of two ways. Daily invoicing creates one invoice per customer per day, usually for account customers with a lot of jobs; cash flow is better and errors are found the next morning rather than at month end. Monthly invoicing creates one invoice per customer covering the month; fewer invoices to chase, but a bigger reconciliation and a longer wait for the money.

Whichever you choose, the rule that saves the most time is the same: price every job on the day it happens, not at invoicing time. If the price is on the job when it is logged, invoicing becomes a review rather than a rebuild. You read down the list, fix the one that is wrong, and create the invoices. If the price is worked out at invoicing time, every job is a small research task and the evening is gone.

What a fuel levy is for

Diesel is the one cost in a courier business that moves every week and that you cannot control. A fuel levy is a percentage added to the freight charge that rises and falls with the price of diesel, so that when fuel goes up your margin does not quietly disappear, and when it comes down your customers see the benefit without you having to reprint a rate card.

Without a levy, operators do one of two things. They leave their rates alone and absorb the increase, which is how a profitable year turns into a break-even one. Or they put rates up to cover fuel and never put them back down, which customers notice and resent. A levy that is set once and moves on its own avoids both.

How to set a fair levy

A levy needs four decisions, and they only have to be made once.

A baseline fuel price. This is the diesel price your freight rates were built on, the point at which the levy is zero. If your rates were set when diesel was $1.95 a litre, that is your baseline. Write it down; it is the number everything else measures against.

The current price. The fairest measure is what you actually pay: the average price across your own fills over the past week. It reflects your real costs, it changes gradually rather than jumping on one expensive fill, and it is a number you can show a customer who asks.

A share of the increase. Fuel is not your whole cost, so the levy should not move one for one with the diesel price. If fuel is about a fifth of your running costs, then a 10% rise in diesel justifies roughly a 2% levy. That share, often around 20%, is the factor the levy is scaled by. It is the number most operators get wrong, usually by setting it too high and having to explain it.

A cap, and a floor of zero. Decide the highest levy you would ever charge, so a spike in diesel never produces an invoice that shocks a customer. And when diesel falls below your baseline, the levy goes to zero rather than negative; you do not pay customers for cheap fuel.

Put together, the levy for a week is the percentage rise in diesel above your baseline, scaled by your fuel share, never below zero and never above your cap. Reviewing it weekly, from your own fills, keeps it honest. Reviewing it once a quarter from a news headline does not.

Telling your customers

A levy only causes trouble when it arrives unannounced. Put a line in your terms that says the freight rate is subject to a fuel levy that moves with the diesel price, show the levy on every invoice as its own line with the percentage, and be ready to explain in one sentence how it is worked out. Customers who understand why a number moves rarely argue with it. Customers who find a new line on an invoice with no explanation always do.

Some customers will ask to be excluded, usually because fuel is already built into a negotiated rate. That is a reasonable request for a large account, and it should be a setting on the customer, not a thing someone remembers each month.

Where the time goes, and how to get it back

Nearly all of the invoicing evening is spent on gathering and checking, not on invoicing. The jobs live in one place, the prices in another, the proof of delivery in a driver’s photo roll, and the levy in someone’s head. The fix is not a faster spreadsheet. It is having the job carry its own price, its own proof and its own levy from the moment it is logged, so that at the end of the day there is nothing to gather.

That is how Nado approaches it. Every job is priced against the customer’s rate as it is logged, by the driver or the office. The fuel levy follows your own fills each week, with your baseline, your share and your cap, and is applied to every invoice unless a customer is excluded. At the end of the day the office sees one screen: each customer’s jobs grouped, the levy applied, a total for every vehicle. You read through it, fix anything that is wrong, and create the invoices in one go. They are created in your accounting software with the same numbers you just approved.