Originally Posted by seabee24
well you should have a price per gal when you buy the gas. That should come off your receipts when you purchase it, but otherwise all you can really track is the gals used. after all how if you had 100 gal tank, filled 50% with 3.50 per, and the other half with $4.00 how do you say which gas cost went into the mower - you cant
you just track the gals used.
When we looked into putting tanks in I asked my accountant this. He said to use the First In First Out inventory method. Which is the standard method for most inventory and supply tracking. Even though the different cost fuel mixes together, you account for using the oldest first. For example, you get 100 gal @ $3.00 per gal then 100 gal @ 4.00 then a delivery of 100 gal @ 3.50 per gal. Over the course of the month say you use only 250 gal of the 300 delivered, you would account for it as 100@$3, 100@4, and email@example.com= $875. The remaining 50 gallons would be accounted as the first fuel used for the next month.
To make it even easier, most bulk fuel distributors will track all of it for you. When I looked into it, the distributor did everything. The got the permits for fuel storage, they installed the tanks, they owned the tanks, pump and meter, and they owned the fuel. They would come out monthly, or more often if needed and charge me for the fuel we pumped from their tanks and not charge for the amount they delivered that month. The only reason we didn't end up doing the tanks is because we couldn't get permits because of being surrounded by conservation land.