Leasing at Prime

Curiously enough, the higher the price of fuel goes, the more money you make - because of the way the fuel surcharge is calculated. That works as long as you're getting great fuel mileage. If your mileage goes in the crapper, that's the end of it. The practical limit is when the bottom falls out of the economy due to energy costs being too high.

 

It's quite possible to make one of these deals work. You have to be inside of the numbers, and manage the situation properly. A very high proportion of lease ops never read their settlements, let alone do any basic financial analysis of their business. They run the business on autopilot, and then wonder why the show crashes and burns!

 

Same here... what else do you have to do on a long 34 eh? Getting that look into what your settlement is telling you is all-important. So if you look back towards the beginning of the thread, I've posted some things that I consider important. This is a rehash of my earlier posts, but given another years perspective and listening to other folks just reiterates how important this part of being a lease-op or owner-op is. If you're not prepared to do your own basic accounting and get inside your numbers, you're not ready to step-up to the responsibilities of being a businessman/trucker. Stay on the company side! You've been warned!!!

For me, calculating the fuel cost per mile after all fuel surcharge payments and knowing where my operating ratio is going to come in are the two really vitally important pieces of information I want to know on a weekly basis. Fuel is king of the profit/loss sheet, and is going to determine how fat your wallet will be. The operating ratio tells you whether you're doing great, just OK and need to work on it, or you need to throw in the towel. The longer term reports allow me to calculate my bottom line per-mile cost of doing business, gross income per mile, daily fixed costs - all averages, but the numbers that tell me whether it's time to think about turning down a load, or if I just hit the load jackpot.

If you're going to do your own spreadsheets to analyze your business then one thing you should think about is designing them so that they require the minimum amount of weekly work possible - it helps to keep the drudgery of this to a minimum. I'm repeating myself here, but I use the "basic accounting service" to do some preprocessing of my settlements to get that information into a managable format. The report that's attached to your settlement combines all of the dollar amounts from each trip into useful categories... gross income, dollars paid at the pump for fuel, the different fuel surcharge payment categories, total numbers for fixed and variable expenses, etc. This is work you'd have to do in order to get your statement into a handy format to do your accounting - it's well worth the cost in my opinion, $21.75 per week. You can calculate what your time is worth at 55mph - I'm betting it's more than this per hour, and this certainly saves me an hour of sheer numeric torture every week.

Then I select about 18 or so numbers from it to put into my spreadsheet. That does a couple of things... it gets my head inside of the settlement on a weekly basis to see what went down, and I get my analysis done to see how I did. But the important thing is that it gets me to look at the charges against my gross revenue, any advances (only for lumpers!) maintenance invoices, reimbursements and the like. You know what you did last week (probably the last time your noggin will register this before the road bumps that stuff right out!) so anything that doesn't look right is going to stand out to you. A year or so down the line at tax time is not when you want to try to remember whether the TA in BFE charged you too much to rejigger your framazoid. The week after you get your settlement emailed to you (HINT!) is the time to call your FM, RA or payroll about anything that may be a mistake or that you have questions about. I have caught double billings by outside vendors by doing this - that is a mistake folks, not a "rip off." It happens.

That weekly data entry is about the only real "work" in this at all. My monthly, weekly and yearly reports just pull information from the weekly spreadsheets, and its done! I use one spreadsheet, and then have quarterly and monthly report pages and a page for each month within it. It's important to keep the amount of work that goes into this to a minimum - to help you keep up with it. It's also important that you regularily backup this information on a medium that's not "in" your computer. Your hard disk is very reliable these days, but disk crashes still happen. Everything about my business is in one folder on my laptop - I compress this one folder and copy it onto a USB thumbdrive.

So what if you're not handy with spreadsheets? You still have to do this. It's vital if you're going to be successful, and one of the things that keeps you from posting how you got nickle 'n dimed to death and how Crime Inc robbed ya, etc, etc, blah, blah, yadda, yadda, yadda! BTW... best year yet for me, and way above what I did on the company side! I don't endorse or obtain any profit from this, nor does TTR... just a couple of ideas to get you going:

Kevin Rutherford (no matter what else you might think of him and his show) has a very nice IMO cloud-based internet accounting service, ProfitGauges, that gets you simple one page reports. There is help available... a person, to get you through the rough spots. This service is customizable to what you're doing. $23 per month as of this posting. https://www.mygauges.com/ The FuelGauges program available on the same site is free, and is a fuel economy tracking program that is very useful. And it's FREE. It does include your APU fuel usage in the per-mile numbers it calculates, but that is information that the ECM report number used in all of our other reports doesn't include. It gives you real fuel economy and cost numbers, and the graphical online output is very valuable. Did I mention, it's FREE??? You can also rate yourself against folks outside of Prime as well.

Dieselboss has a Microsoft Excel based spreadsheet program available for $28.95 (more if you want a CD backup disk) as of this posting. You must have MS Excel loaded on your computer (that means you paid Microsoft and Bill Gates a couple hundred for MS Works) for this product to work on your computer. Lots of colors. I've never used it myself, however I did look into it at one time or another. My thoughts are that you have to fit your business into what the product does - and that may or may not work for you. It probably helps if you have a little knowledge of very basic accounting to help it make sense for you - but so does my approach. http://www.dieselboss.com/software/accounting.htm

Googling "trucker accounting software" brings up a number of links that you can explore if none of the above turns your crank. All of the costs associated with this, no matter how you go about it, are tax-deductible as a legitimate cost of doing business. Remember this is to give YOU the power through information to be successful.

When I go over the posts in the TTR "Bad Company Folder" the one thing that really stands out to me is that those folks who post there don't know the basic numbers that would have informed them about how their business is doing - they gave away their power to control their destiny before they even started. What they do know is that their bank account is in intensive care, the bills aren't getting paid, and they've decided that what is happening to them must be the fault of someone else - invariably the carrier. Past tense. By the time they are posting over there it's all done, and they're on the way out as a failure. Don't let this become the description of your story! You have the ability to take control of the situation in order to be successful.