Are you aware that 10% of ground handling invoices are incorrect?
| Company | PDC |
|---|---|
| Date | 10.08.2020 |
Invoice management may be a dry subject, but airlines should be aware of the potential savings.
Lack of control costs airlines dearly in Ground Handling expenses. Investigations show that up to 10% of invoices are incorrect and airlines end up paying for services they never receive. Many airlines neither have the resources nor a system to check the provided services.
A way to address this challenge is to use a contract and invoice management tool that identifies incorrect invoices. Surveys confirm that the potential savings can reach up to 2.5% of the ground handling budget. For a mid-sized airline with a budget of, say, $60M, this represents a $1.5M cost reduction.
The reality of invoicing
When airlines receive ground handling invoices, often they pay without further checking for alterations in operations, such as cancelled flights, change of aircraft type or changes in required services.
A small to mid-sized airline receives 500 to 3,000 invoices per month, so the sheer quantity makes it challenging to handle. Moreover, some services have complicated cost structures, which makes them cumbersome to verify manually.
The point is that incorrect invoices amount to a significant amount of money; so, it will have a positive and direct impact on the bottom line if the airline has an effective way to deal with this issue.
Tailormade for airlines
In close collaboration with Aegean Airlines, PDC developed “GroundCost”, which is an innovative optimisation and forecasting tool for contract management and invoice control.
Using GroundCost makes everyday tasks easier and quicker for Aegean’s controllers. They no longer print invoices, cross-check each one manually and type them into a database.
“We had trouble keeping up with the increasing volume of invoices, and it was tedious work to check them. Once we have the contracts and the price models in the system, we can now check most invoices in just a few minutes,” explains Stathis Trivoureas, Report Analyst at Aegean.
