Keeping track of O/O operating costs

If a person has some familiarity with using spreadsheets on a computer, a free office software, like OpenOffice, and a little time setting up monthly, quarterly, and annual spreads that talk with each other, and you can have a well rounded package custom tailored to your operation. No way you can lose your way on managing the numbers. A quick upload of the info to an accountant, if you choose to use one.

 

Find your TOTAL per MILE costs divide that by .79 and that is the LEAST amount of $ per mile you can operate for and you might be still around next year.

And your maintenance costs per mile vary year by year based on the age / mileage of the equipment, 5th year is the MOST costly ( reason many FLEETS dump tractors at 31/2 / to 4 1/2 years old )

 

good words of wisdom...thanks Bjohn

 

Whether you use a spreadsheet, trucking specific software or a pencil and paper, you need to know where you stand in your business. Having up to date information can help with your decision making and planning for your business. Unless you have experience with spreadsheets, you would probably be better off with a trucking specific software program. There are some who use standard accounting programs such as Quickbooks Pro. You may want to check with your accountant to see what works for them. The trucking software can print reports that your accountant can use. If you use the same software as your accountant, they can simply upload your data from a disc or zip file into their software.

 

I would generally agree, if someone has no desire to learn spreadsheets and such. The one area that spreadsheets really shine is doing "what if" calculations. You can do projections on how a change to the way you are doing things will affect the big picture. Sure, it takes time and liitle effort to learn to set up spreadsheets and use them, but even a "canned" software package takes time to use well. But then, anything worth doing takes time and effort. That is if one is actually trying to run a business. There is no "one size fits all solution". Just depends on what you are trying to accomplish.

 

Spreadsheets are great to do "what ifs." OOIDA has a pretty good spreadsheet set up for those planning to buy or lease a truck. www.ooida.com. I am not sure that most drivers are familiar enough with spreadsheets to do all of their accounting for the business. By the time you figure the time involved in setting up tables and a spreadsheet you could probably have bought a canned program. I like the canned programs because it will immediately give you your earnings per mile or cost per mile as quickly as you put in your trip information. Of course, you can get the same information using a spreadsheet, but it is much easier with one of the programs.

 

Regardless of what you use to generate them, the "what if's", are IMHO the most important part of planning and management. All the opinions I share on TTR come from both experience and the many what if's I've ran and played over in my mind.

While it was aviation that taught me the true value of this method I have always spent too much time playing things over in my mind. I answer many questions before they happen and have a planned response because I played what if. It is so much easier to enact a planned response to a bad situation than it is to develop a proper response to a high-pressure continually deteriorating situation. Most humans if put under enough pressure will continually make bad decisions, myself included. Granted a few are cool enough to make sound decisions under pressure and ask for more.

I believe failure in business is a lot like accidents in aviation or trucks. Very few accidents are a product of a single mistake or bad decision. Most have a chain of events both causes and contributing factors. At any point a person recognizes they are in this situation, they can break the chain and avoid the accident. Having a planned response allows you to both recognize the situation and make a timely and proper response. Once you have broken the chain of events you can coast to the shoulder and make a new plan. This works for business as well as accidents.

 

Guess I am just one that believes that without the tools to understand your business on a day-to-day basis then you positioning yourself to be less competitive. Not saying that I look at these daily, but I often do go back and look at loads and lanes to see how they did.

 

That is an interesting fact. I would love to know the specifics of that. Is it when the depreciation factor for tax deductions runs out, or is it the point when money has to be sunk in a tractor due to wear items?