Airlines operate numerous flights and incur various operational costs. Direct Operating Costs (DOC) represent 50-60% of an airline’s overall cost structure. Today, it is challenging for an airline to verify and validate each DOC invoice against operational data and complex vendor contracts. Most of the airlines adopt sampling method to verify vendor invoices leading to vendor overpayments. A recent research indicates that airlines typically overpay their vendors to the tune of 0.5 – 2.5% depending upon DOC category.
Accelya’s FinesseCost helps airlines efficiently manage their Direct Operating Costs (DOC). It streamlines the payables process by automatically processing E-invoices from various DOC vendors such as airports, ATC and fuel companies. FinesseCost accurately estimates flight’s operational costs based on actual operational data and vendor contracts. It reconciles these estimated billings with the actual invoices to identify vendor overbilling. Near real time reports help airlines in vendor analysis and facilitate better flight planning, expense budgeting and forecasting.
Airlines have the flexibility to implement individual categories such as Fuel, Airport, Navigation, Catering,Ground handling, PAX handling, PAX Security, Cargo handling – allowing airlines to phase the implementation as per their business needs.
FinesseCost has a powerful contract management engine for managing vendor contracts. Expected billing generated using the contract information and operational data is reconciled with actual inward invoices at a granular level (e.g. – station, flight date, flight number etc). The accurate reconciliation results highlight vendor overbilling. This ensures that appropriate measures then can be taken to prevent vendor overpayments.
All flight-related costs are calculated based on actual operational data and vendor contracts, way before the actual invoices are received from vendors. FinesseCost can post these as accruals in the books of accounts thereby helping timely and accurate month closures.
FinesseCost facilitates vendor analysis over a time period and across stations. This is an effective tool for airlines to avail volume discounts/negotiate better rates with their vendors.
FinesseCost centralizes and standardizes invoice receipt/workflow processes across business units. It automatically captures actual invoice data from scanned documents, paper invoices, emails etc. It validates this data against the expected billing putting exceptions for specific approvals through configurable workflow. Auto posting to ERP minimizes manual efforts, errors.
FinesseCost provides near real time reporting of operating costs at flight level. This facilitates flight profitability analysis, budget planning, forecasting or simulation of individual flight events. It provides valuable insights for cost control and rationalisation.
Webinar - Prevent DOC Vendor Overpayments; Efficiently manage your Direct Operating Costs (DOC)