Here’s a statistic that might surprise you: 67% of past-due invoices in the fuel distribution industry are caused by internal errors. Yes – internal errors. Not late-paying customers, not unforeseen market conditions. Rather something that's happening inside these companies.

This statistic comes from Ann Pitts, someone who's spent over 20 years in the trenches of the petroleum industry. She’s seen it all. And as you’ll soon discover, these internal mistakes are costing fuel distributors more than just a few bucks – they’re putting entire operations at risk. So let’s dive into this.

How big is the problem of past-due invoices anyway?

Fuel distributors operate in a razor-thin margin world. Every cent matters. Now imagine you’re carrying millions—at times $30 to $40 million in accounts receivable. That’s money you’re waiting to collect. You need that cash to keep the lights on, but every mistake in billing, every error in dispatch, delays those payments. And guess what? Your margins shrink even more.

As Ann puts it: “20 years ago, it wasn’t uncommon for companies to carry $10 million in receivables. Today, that number has ballooned to $30 or $40 million.” That’s millions of dollars that fuel distributors are waiting to get paid – but only if they get the invoices right.

But it’s not just about big numbers. Let’s break this down.

What causes these massive delays in invoicing?

1. Invoicing Mistakes = Delayed Payments

Fuel distributors process a lot of invoices. We’re talking about thousands of transactions every month. And when errors happen – say, incorrect pricing or missed purchase orders – customers won’t pay until they’re sorted out. Pitts explains it perfectly: “Customers are unlikely to pay invoices they either never received or that contain errors.” Every delay in payment is a hit to cash flow, and when your margins are already thin, this becomes a massive issue.

2. The Dispatch-Order Management Problem

The process of dispatching and order management plays a critical role in the smooth operation of a fuel distribution company. Missed orders. Wrong pricing. Invoices that don’t match what the customer received.

Pitts captures this perfectly: “Even a small mistake in dispatching or order management can lead to significant financial strain when those errors translate into unpaid invoices.”

Here’s how it plays out:

• Sales, dispatch, and billing are out of sync.

• Orders get missed or priced incorrectly.

• Invoices go unpaid due to confusion.

The result? Delays, bottlenecks, and unpaid invoices.

3. Receivables Management: The Hidden Time Bomb

Managing receivables in fuel distribution is a bigger challenge than it seems. With tens of millions of dollars tied up in receivables, even small delays in payment can cause significant financial strain. Pitts drives home the point: “With slim margins, these companies can’t afford delays in collecting payments.”

Here’s why this matters:

• Large receivables = financial risk: When payments are delayed, cash flow gets squeezed.

• Every delay counts: Even minor issues can magnify when you’re dealing with millions in receivables.

The longer it takes to collect, the higher the risk of bad debt, which puts a business in a precarious financial position.

The Bottom Line

Fuel distributors aren’t being held back by their customers or the broader economy—it’s internal inefficiencies that are costing them millions. The good news? These problems are entirely fixable.

Yes, the challenges are significant. But the opportunities for improvement are just as big. Here’s what fuel distributors need to keep in mind:

• Slim margins and large receivables mean precision is critical.

• Invoicing errors have a direct impact on profitability.

• Strong coordination across departments is key to avoiding costly delays and mistakes.

As Ann Pitts says, “In an industry where competition is fierce and margins are thin, efficiency isn't just a benefit—it's essential for survival.”