If you’re an owner operator or running a small truck fleet, trying to figure out if you’re making money and where you’re losing it is not a simple process. Normal business accounting programs just don’t cut it.
I know that every industry has its own accounting quirks. Ours are just… quirkier. That’s why trying to use normal accounting reports like a Profit and Loss statement to understand where a trucking business is making money is useless. Bankers and investors love the P&L. Trucking businesses can use this report to figure out how the over-all numbers add up in the end, but to understand how to improve the number you need to be looking at something different. In the business of booking freight to haul, everything is based on miles and revenue per mile. Shorter miles equals more money per mile, but will you be able to run enough miles to make it pay off? Longer miles equals more revenue but revenue per mile is less. What is the best option and what should you do to improve the bottom line? The first step is to watch these numbers! Use the Company Overview Report in you TruckingOffice account.
I don’t think most truckers know what it costs them to haul freight.
They guess that taking any load will make them money. Just get the highest paying load on the board that fits their schedules and they’re happy. But I think it’s more important to know if the freight is going to pay its way. I guess I could try to do it with perfect odometer readings and a spreadsheet – but any old accounting program is just not up to it.
Why is a company overview report important?
Why by month? Because you have to include the deadhead miles. Those miles can be averaged and then that number can be used to calculate the expenses of the entire month, which gives a clearer picture than trying to figure this out load by load. It would be looking at the trees instead of the forest when you look at single loads.
From the data, a company overview report will show you each month’s totals of revenues, miles and expenses. We truckers need this specialized report in order to know
- Is a load going to make us money or cost us money?
- Am I making enough profit with my current rigs and routes?
- What loads are the most profitable?
When I’m looking at a load board, I have to consider not just what the rate for the load is going to be – I need to figure in the deadhead miles to the pickup and from the delivery to my next load. Those miles are part of the cost of doing business. I can’t ignore them.
Based on this chart, if I take any load that brings in less than $1.21 per mile, including the deadhead miles from my last delivery, I’m taking a loss. Sometimes, I’m willing to make less money to make sure I have fewer deadhead miles. I’m not making any money on an empty trailer, but getting $0.64 per mile to haul from Florida to Tennessee is never a good deal for me. I’d rather wait to find a better rate than take that kind of a loss.
How Organized Are You?
Do you know your revenues per mile? Your expenses per mile? Your profit per mile? Can you figure it out without duplicating a lot of data entry and math? That kind of information requires a lot of organization and effort. A standard accounting program can’t compute it for you. But can your trucking business survive if you don’t know those numbers?
Without an extra work on your part, you can find them quickly and easily with TruckingOffice trucking management software. Our Company Overview Report will show you how to make a greater profit without spending a lot of extra time with your logbooks and receipts. Everything you need is entered one time into TruckingOffice with the dispatch. No duplication. No repeats. Organization can never be any easier.