A helpful tip to start controlling costs is looking at possible ways to decrease costs by shopping around for insurance quotes, find discounts on regular truck maintenance, driving slower for better fuel economy, and avoiding tolls if possible.įuel is usually the highest expense and the hardest to control. When you are more familiar with the costs of your trucking company it becomes easier to adjust some of your highest expenses. When you keep track of your finances using a P & L you become attentive to the costs of operating your trucking company. Truck drivers get paid per mile but also spend more money on fuel when they drive more miles, so getting a handle on basic trucking company accounting can help you start to anticipate and budget expenses so that you can make a profit.Ī profit and loss statement, or a P & L, is the best way to determine your trucking businesses net income by listing out your revenue and expenses during a specific period of time, usually every 3 months or annually. In the trucking industry, there is a major paradox when it comes to trying to make money without turning around and spending it all on necessary expenses. Revenue – Expenses = Profit or Net Income Applying Budgets to your Business Profit is the amount of money that is left after expenses are taken out.For example insurance, fuel, payroll & truck financing are expenses. Expenses are the costs of operating a trucking company.Revenue is income, or the checks that you cash from your customers.To better explain this process, we will define the following words in laymen’s terms revenue, expenses, profits, and net income. The starting point for trucker accounting 101 is to understand how much money is coming into and going out of your trucking business. To help you become more financially savvy we will break it down and even give you some tools to download that you can start using right away. Knowing accounting basics for trucking companies is essential because only 15% of newly formed trucking companies make it to their second year of operation, some of it due to truckers being unaware of how to control costs. There is a big difference between knowing a lot about trucking and knowing a lot about how to have a successful trucking company. According to Kevin Rutherford, an owner-operator accounting software creator, only 10% of owner-operators actually know their own cost per mile. While accounting words like assets, equity, and expenses seem foreign to most truckers. Using trucking jargon like reefer, deadhead, TONU, hot shot loads, and alligator can sound like a totally different language to people not in the trucking industry.
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