- Solutions
- AI First Services
- Business Outcomes
- Industry AI Accelerators
- Insights & Resources
- About
For business management solutions email us or call 020 3004 4600
Fuel price swings, tolls, carrier rate rises and peak season surcharges are not occasional events in distribution. They are a permanent part of the cost base, and the businesses that handle them well build them into their pricing and invoicing routines rather than reacting each time.
This article explains how Dynamics 365 Business Central can manage delivery surcharges at scale, with far less manual work and far fewer missed charges.
In many distribution businesses, surcharges are calculated outside the ERP, added to invoices by hand or tracked in a spreadsheet. When a rate changes, someone has to update the calculation, brief the billing team and check that the change reaches every affected invoice.
Each of those steps can fail. The result is missed surcharges, out-of-date rates and customers being charged inconsistently. Across hundreds of invoices a year, that adds up to meaningful revenue leakage that is hard to spot and harder still to recover.
Business Central gives you three main ways to bring surcharges inside the system, so the same rules apply to every order.
Recoverable costs such as fuel, pallets, remote area delivery and hazardous goods handling can each be set up as their own charge, using a G/L account, a resource or an item charge. They then appear as separate, clearly labelled lines on orders and invoices.
Applying those charges automatically by postcode, weight or customer group needs a small amount of configuration, typically a Power Automate flow or a light extension. Once it is in place, a rate change is made once in the setup and flows through to every later invoice, with no briefing note or spreadsheet update required.
Some customers agree all-inclusive rates. Others pay a base rate plus visible surcharge lines. Business Central's customer price groups and price lists let you hold different charge structures for each segment without managing every customer individually.
Because the structure comes from the customer record, the right charges are applied whoever processes the order.
If you price by weight band, delivery zone or order value, those structures can be set up in Business Central's price lists. When an order is entered, the charge is calculated from the order's actual details rather than looked up in a manual rate matrix.
That removes the small, repeated errors that build up when rates are looked up and keyed by hand.
Recovering surcharges from customers is only half the picture. The surcharges your carriers charge you need tracking just as reliably.
Subcontractor carrier costs can be posted against the relevant project in Business Central (projects were called jobs in earlier versions), or tagged with dimensions such as route or customer contract. That lets you compare what you bill customers in surcharges with what you pay carriers, so any gap shows up early rather than as a margin surprise at month end.
More distributors are moving to index-linked fuel surcharges that track a published benchmark and adjust automatically. This avoids renegotiating every time fuel prices move, and gives customers a clear, auditable reason for each change.
Common UK references include the government's weekly road fuel prices and the Road Haulage Association's cost tables. You can hold the current index value in Business Central and link each customer's surcharge rate to it. When you update the index, the surcharge changes for every customer on that arrangement at the same time.
Once surcharges are managed inside the ERP, recovery becomes measurable. Power BI connected to Business Central can compare surcharge invoiced against surcharge incurred, by period, carrier or customer.
That shows exactly where margin is leaking, at a level of detail a spreadsheet process cannot provide.
If your surcharge process is manual or inconsistent, we can show you how Business Central would handle it in your environment.
Contact Advantage today or call 020 3004 4600 to speak to our team.
Yes, with some configuration. Surcharges can be set up as their own charge lines, priced as a percentage or a fixed amount, for all customers or by customer group. A Power Automate flow or a light extension then adds them to orders automatically, so a rate change made in one place applies to every later invoice.
Keep base delivery charges and variable surcharges as separate invoice lines. Customers see clearly what they are paying for, rate updates are simpler, and your reports separate base revenue from surcharge recovery. A surcharge generally follows the VAT treatment of the delivery it relates to, so check that each charge line carries the right VAT setup.
A fuel surcharge index links the surcharge to a published fuel price reference, such as the government's weekly road fuel prices or the Road Haulage Association's cost tables. When the reference moves outside an agreed band, the surcharge moves by a set amount. Customers get transparency, and you avoid renegotiating every time fuel prices change.
Enter the new carrier rates in that carrier's purchase price list in Business Central as soon as they are agreed. If you pass the increase on, update the customer surcharge or delivery charge at the same time. The aim is to stop increases being absorbed quietly through a gap between cost and billing.
The technology you use should help you move faster, not hold you back. At Advantage, we help SMEs unlock the full power of Microsoft - from cloud and security to AI and automation. Whether you're modernising systems or exploring Copilot, we'll help you transform the way you work. Let's build something smarter. Together.
Contact Us Today 020 3004 4600
