Tips for Trucking Companies to Reduce Taxes on Fuel Cost
As a trucking company, you have to keep a close watch on the bottom line. Questions about tire costs and fuel efficiency are very important to ensuring that you make your budget every time. If you don’t know your real costs, you can’t effectively manage your budget. By clearly defining what your real time costs are, you can be more in control of your trucking company’s budget.
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Costs That Need to be Tracked
All costs need to be tracked…even the seemingly small ones. Understanding how much your office supplies cost and how often they need to be reordered. Costs associated with communications and corporate promotion can help you understand where cuts can be made. Also, working closing with your insurance agent can help define exactly how much coverage is truly important for the company and its vehicles. They may also be able to find discounts that can help your budget. The other thing is that it is important for staff to understand what the bottom line looks like. This can give them insight into the company. By partnering with employees empowers them and invests them in the goals and health of the company. As you develop an understanding of where the company’s funds are going, you’ll begin to notice areas that might be problematic. This gives you the opportunity to begin to address them.
Trucking Company Fuel Costs
The biggest financial line item for trucking companies is the fuel costs. This is also an area where, with some prudence, savings can be realized. While fuel is essential for the operation of a trucking company, it is also a commodity that should be monitored. The American Transportation Research Institute reports that, “fuel now consistently represents the largest share of total average marginal cost for motor carriers.” While fuel may be the largest expense that a trucking company has, it doesn’t mean that it is impossible to save money. Those that focus on enhancing fuel efficiency, for example, are able to reduce their fuel costs.
Steps to Reduce Fuel Costs
By involving drivers in the company’s attempt to reduce costs involves them in the overall success of the operation. Emphasizing reducing idle times, maintaining proper tire inflation and consistent acceleration are all things that can be done to improve fuel efficiency and reduce fuel costs. Also, examining the routes that trucks can let you know if there are any inefficiencies. If there are more straightforward routes, this can result in savings for the company. Occasional vehicle inspections with a trained professional can sometimes highlight areas where money can be saved or fuel efficiency can be increased.
Consider the Benefits of Outsourcing
Even smaller trucking companies have tasks, like marketing or accounting, that need to be handled. There is also the constant recruiting of new drivers. These are ongoing business activities that have to be handled yet they are not the company’s core competency. In these cases, it may be better to outsource these tasks to an expert. A professional may be able to handle them better. Invoicing and collections are something that many trucking companies outsource. IT services and human resources are another area that you may consider outsourcing. It allows you to not stretch staff resources too thinly while keeping the money coming in. Just be sure that the costs associated with any service make sense for the overall financial health of the company.
As you begin working on improving safety and fuel efficiency, you’ll begin to realize savings in other budget areas such as insurance premiums. A good safety record will lower your premiums. You may also see a reduction in workers compensation claims. Try Budgetry: for budgeting tips. Cashry has information on lenders and financial tools. For tax related tools, turn to Taxry. While we are not a lender, we link individuals and companies with qualified lenders and a wealth of savvy financial information. These are the tools you’ll need as you look for ways to manage costs. These are the tips for trucking companies to reduce taxes on fuel costs, for example. By applying the information you find, you’ll have a stronger trucking company.