Last week we discussed why and how you should be tracking your business expenses, but this week our primary focus is on the types of trucking expenses business owners will frequently experience – fixed and variable costs. Let’s first define each!
What are fixed costs?
Think of fixed costs as costs you will incur regardless of whether your truck is operating. Fixed costs typically do not change or go away even if your wheels aren't spinning.
What are variable costs?
Variable costs will fluctuate with the productivity of your business and the operation of your truck(s). In other words, the more miles you drive the more variable costs you incur.
What are some examples of fixed costs in trucking?
Fixed cost examples include:
Annual vehicle inspection
Drug and Alcohol Testing
Technology – phone, internet
Fuel Card Fees, Prepass E-Z Pass Fees
What are some examples of variable costs in trucking?
Variable cost examples include:
Maintenance – tires, oil changes, truck washing, etc
Factoring Fees/Accounts Receivables (where applicable)
Lodging & Showers
How can I track my fixed and variable expenses?
We’ve created a pretty solid template that is MUCH more than expense tracking. The Definitive "All-in-One" Trucking Business Spreadsheet is...well, an all-in-one spreadsheet for your small trucking business! The workbook includes a detailed business dashboard that features key metrics to monitor your business's health such as your average cost per mile, expense and revenue totals, and more. With formulas already built-in, tracking expenses, revenue, trip details, and miles is easy! You will also receive a BONUS Tax Deduction summary report based on your specific operation. The spreadsheet also features 17 expense categories that will allow you to easily organize and track your business expenses.
Having a basic understanding of your fixed and variable costs will help you calculate your cost per mile, build a business budget, make informed financial planning decisions, identify areas for cost reduction, and help you anticipate costs or financial risks.
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC does not assume responsibility for any omissions, errors, or ambiguity contained herein. Contents may not be relied upon as a substitute for the FMCSA's published regulations. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.