Trucking Accounting: What Carriers and Owner-Operators Need to Track

Start with a clean chart of accounts

Set up accounts that separate revenue by type and costs by category: fuel, maintenance, insurance, tires, permits, driver pay, and truck payments.

A generic small-business chart of accounts hides what a carrier needs to see. Build categories that match the work:

• Revenue: line haul, fuel surcharges, accessorials such as detention and lumper reimbursement
• Direct operating costs: fuel, tolls, tires, maintenance and repair, driver pay or settlements
• Fixed costs: truck and trailer payments, insurance, permits and licenses, parking, ELD and software
• Overhead: office, accounting, dispatch fees, communications

Use a dedicated business bank account and card, and a separate account for tax set-asides. For general habits that apply, see bookkeeping tips.

Know your cost per mile

Cost per mile is total operating cost divided by miles driven. It tells you the minimum rate a load must pay for you to make money.

Without this number, you cannot tell a good load from a bad one. Add up fixed and variable costs for a month, then divide by total miles, including empty miles.

This is an illustrative example. Suppose monthly costs are $9,000 for fuel, $2,500 for the truck payment, $1,200 for insurance, $1,000 for maintenance and tires, $600 for permits and other items, and the truck covers 8,000 miles. That is $14,300 of cost over 8,000 miles, or about $1.79 per mile. Any load paying less than that, after counting deadhead miles, loses money.

Update the figure monthly. Fuel and repair costs move, and your break-even rate moves with them. Our cost of starting a trucking business guide lists the cost lines to expect.

Fuel, IFTA and the taxes unique to trucking

Carriers that cross state lines typically file quarterly fuel tax reports under IFTA and may owe the Heavy Vehicle Use Tax. Keep mileage and fuel records by state.

Interstate carriers usually register under the International Fuel Tax Agreement, which simplifies fuel tax reporting across member jurisdictions. You report miles driven and fuel purchased in each state, and settle the difference each quarter.

Record keeping that makes this easier:

1. Keep fuel receipts showing date, gallons, price and location.
2. Use an ELD or mileage tracking system that logs miles by state.
3. Reconcile fuel purchases to bank and card statements every month.

Heavy trucks may also be subject to the federal Heavy Vehicle Use Tax and other fees, which change over time, so check the IRS and FMCSA sites or ask a trucking-savvy accountant. Owner-operators also pay income tax and self-employment tax, so set money aside as read in tax write-offs for the self-employed.

Depreciation, equipment and what you can deduct

Trucks and trailers lose value over time and are typically deducted through depreciation. Repairs, tires, insurance and many operating costs are deductible in the year paid.

A truck is a major asset, so the tax code spreads its deduction over several years, with options for faster write-offs that change from time to time. Interest on truck financing is generally deductible as a business expense.

Common deductions include fuel, repairs, tires, insurance, permits, tolls, parking, communications and professional fees. Per diem rules for drivers who sleep away from home have special treatment, so ask your accountant what applies. Learn the idea behind asset write-downs in what is depreciation.

Do not buy equipment just for the tax effect. A $120,000 truck that sits idle costs real money no matter what the deduction saves.

Settlements, factoring and the cash flow gap

Shippers and freight customers often pay 30 to 60 days after delivery while fuel and payroll are due now. Track receivables weekly and plan for that gap.

Cash flow is the most common trucking problem. You pay for fuel at the pump, drivers every week, and insurance monthly, while customers pay later. A profitable carrier can still run short.

Keep an aging report of unpaid invoices, and follow up on anything past terms. Some carriers sell invoices to a factoring company for fast cash. ROI Funder does not place invoice factoring, so compare factoring costs carefully on their own terms. Read understanding invoice factoring for how it works and what it costs.

Also track driver pay as either employee payroll or contractor settlements. Misclassifying drivers causes tax and legal trouble, so get advice early.

Reporting that shows where you make money

Review a monthly profit and loss by truck, cost per mile, revenue per mile and days to get paid. These four numbers drive better lane and load decisions.

A monthly review does not need to take long. Look at:

• Profit by truck. One underperforming unit can hide inside a strong fleet average.
• Revenue per mile versus cost per mile. The spread is your margin.
• Deadhead percentage. Empty miles quietly drain profit.
• Days to collect. A rising number is an early warning sign.

Compare each month with the one before. Learn the reports every business needs in necessary reports for small business accounting. Clean books also speed up any funding review, since funders look at business bank statements and consistent deposits.

Funding trucks and working capital: what to know

Equipment financing and working capital can help carriers, but many funders restrict long-haul trucking. Expect questions about operation type, lanes and history.

Trucking is a sector where funding can be harder to find. Many funders restrict long-haul trucking, both truckload and less-than-truckload, so approval is not assured. Regional, local, dump and specialized hauling may be viewed differently. ROI Funder cannot promise funding, but we can review your file and see whether it fits any funder in our network.

If you qualify, equipment financing can fund a truck or trailer in 2-7 days. A payback check is essential. In this illustrative example, a used truck costing $90,000 that adds $4,000 a month in net profit repays itself in about 22 months before financing costs. See also our trucking funding page and SBA loans for trucking and logistics.