At some point, we truckers are going to ask ourselves two questions: How much did we make these loads? and “How much did we spend on these loads?” Why those numbers? Because variable expenses per mile give us some important information to improve our trucking business.
What are Variable Expenses?
Probably you have a good idea what your variable expenses are for your most common trips. These are expenses that change per trip. Might be fuel, might be lumper feeds, might be refrigerant. Those expenses are inconsistent. Trying to track them can be tedious because you just can’t predict when they’re going to show up. They don’t often apply to one load.
Why do we want to know this number? Because it’s critical to understand the cost of running your vehicle.
Fixed Expenses are Easy
Look at your credit card or checkbook and you’ll know what your fixed expenses are. You see them come up every month. Insurance. Loan payments. Software.
It’s hard to make those change. Those expenses just don’t change without effort. We might find a different insurance company. We might pay off a loan. But fixed expenses don’t often change. Trying to save money on fixed expenses isn’t easy. That’s not to say don’t try. Switching from an expensive accounting software package that doesn’t do all the work of TruckingOffice PRO will save you money when IFTA and IRP come around. You won’t have to pay extra for those filings to be created. TruckingOffice PRO already does them.
Subtract the fixed expenses from the revenue for a load and you’ll have the adjusted revenue per mile. But that doesn’t tell you the actual cost of running the vehicle. For that, you have to include your variable expenses per mile.
Variable Expense and the Cost of Your Vehicle
Tracking revenue is simple. It’s what we get paid for the trip. Divide that by the number of miles for the load and you have Revenue Per Mile. Figuring out other “per mile” statistics can be a lot harder. But that’s how we’re paid, so that’s the number we need. How much does it cost to run your vehicle per mile? How much does the support back in the office cost – per mile?
TruckingOffice PRO has the fomulas you need to find out that answer. You don’t have to depend on guesswork with TruckingOffice PRO trucking management software.
Trucker Stats™ help you understand your per mile numbers. The best thing about TruckingOffice PRO is that you don’t have to enter the data again and again. Once you enter your dispatch and the expenses paid, TruckingOffice PRO will compute your variable expenses per mile for you in seconds. When the decision of what to bid on a load has to be made right away, TruckingOffice PRO tells you what you need to know to make a profitable mode.
Use TruckingOffice PRO to Know Your Worth
Trucking has taken it on the chin this year. Truckers are stuck in an insane economy where businesses think that they can cut corners by reducing their shipping costs. But when you know your value, you know what you must have to make a profit. TruckingOffice PRO gives you that number.
We’ll even let you find out for yourself. Use our free trial and enter your data for the past quarter. Then you can
- compute your IFTA to the penny without paying a penny for another software package
- track your invoices – sent, paid, and late
- discover your Trucker Stats™ to make your company more profitable.