Fleet operators · Logistics and supply chain
Truck fleets costed per kilometre and per trip
A fleet operator earns per trip and spends per kilometre, and the two are rarely put side by side. We cost every vehicle per kilometre and every trip against the freight it earned. Driver advances are settled trip by trip and receivables chased from the proof of delivery, so the owner knows which trucks, lanes and customers pay.
In one paragraph
Road transport companies run their own trucks, trailers and tankers, often alongside hired market vehicles, carrying full loads for manufacturers, traders and logistics firms. For owners and finance heads, the cost sits in the vehicle: fuel, tyres, maintenance, tolls, drivers and loan instalments. Revenue is billed per trip, often only after the consignee's proof of delivery reaches the office.
Owner or managing partner
The economics
How the money moves in this trade
Diesel is the largest operating cost, followed by drivers, tyres, maintenance, tolls and insurance. The vehicle itself is usually financed on a loan with fixed instalments. Drivers are given cash or card advances for fuel, tolls and en-route expenses, settled on return. Market vehicles hired from other owners fill gaps in the own fleet at a freight rate that may or may not leave a margin.
Freight bills are raised per trip and are often paid only once the proof of delivery is submitted, so a lost or delayed document becomes a receivable delay. A goods transport agency either pays GST itself under forward charge, an option declared for the whole financial year, or leaves it to eligible business recipients under reverse charge. Payments to transporters owning ten or fewer goods vehicles can be made without income-tax deduction when the prescribed declaration is held. Damage and shortage claims from consignors are deducted from freight. The difference between a profitable fleet and a busy one is cost per kilometre, empty running and collection time.
The problem
Where the numbers usually break down
Cost is pooled across the fleet
Diesel, tyres and repairs are booked as fleet expenses, so no truck has a cost per kilometre and older vehicles that cost more to run are kept on the same lanes.
Driver advances are not settled trip by trip
Advances are given on departure and settled loosely on return, so balances with drivers build up and fuel cost cannot be checked against distance run.
Freight bills wait on delivery documents
Bills are held until the proof of delivery arrives, and nobody tracks which documents are missing, so receivables age for reasons that have nothing to do with the customer.
Market-hire trips have no margin record
Freight paid to hired vehicles is not matched to freight billed for the same trip, and the declarations needed to pay small transporters without tax deduction are not on file.
The GST option is not applied consistently
The forward charge option covers every supply for the financial year, yet some invoices are raised under forward charge and others left to the customer under reverse charge, with no record of the declaration filed.
What we do
The work, and the result each part produces
Cost per kilometre by vehicle
Fuel, tyres, maintenance, tolls, driver cost, insurance and finance cost booked to each vehicle and divided by distance run.
Every truck shows what it costs to run.
Trip profitability
Freight billed against fuel, tolls, driver cost and loading charges for each trip, including empty return legs.
Lanes and customers are ranked by margin.
Driver advance settlement
Advances settled against each trip with fuel, toll and expense evidence, and balances reconciled weekly.
Driver balances stay clean and fuel use is checked against distance.
Proof-of-delivery and receivable tracking
Missing delivery documents tracked by trip, and bills raised as soon as they arrive.
Collection time falls because bills go out sooner.
Market-hire control
Hired-vehicle freight matched to billed freight per trip, with transporter declarations and tax deduction checked.
Market hire earns a known margin and stays compliant.
GST and TDS on freight
The annual forward or reverse charge choice recorded and applied on every invoice, and tax deducted by customers reconciled to credits available.
Tax on freight is consistent and fully credited.
Where we start
The first steps of an engagement
Trip sheets and fuel records
We ask for trip sheets, fuel card and toll statements, GPS distance reports, driver advance registers, freight bills with their delivery status, and market-hire payments.
Vehicle cost and advance check
Fuel, tyres, repairs, tolls and finance cost are re-cut by vehicle against distance run. Open driver advances are settled against trip evidence.
Trip settlement and POD tracker
A trip-by-trip settlement routine for driver advances starts, alongside a tracker of missing delivery documents and transporter declarations on file.
Truck and lane margin report
The first report shows cost per kilometre by vehicle, margin by trip, lane and customer, driver balances outstanding, and bills held for missing proof of delivery.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Cost per kilometre by vehicle
- Margin by trip, lane and customer
- Empty running as a share of distance
- Driver advance balances outstanding
- Trips awaiting proof of delivery and bills unraised
- Market-hire margin per trip
Who it suits
Written for, and not the right fit for
- You arrange freight but own no vehicles; our third-party logistics or freight forwarders pages fit better.
- You need a statutory audit or tax-audit report on its own; that is signed by an independently engaged CA.
- Road transport companies running their own fleets, with or without hired market vehicles.
- Owner-run fleets whose vehicle count has outgrown a diary-and-ledger approach.
- Operators planning fleet replacement, a move to alternative-fuel vehicles or a larger financing facility.
Services
Services this work draws on
Costing and profitability
What each product, line and customer really contributes.
Explore service ↗Outsourced accounting
Your books kept current and reconciled, closed to a published calendar.
Explore service ↗GST, TDS and tax compliance
GST, TDS and income-tax prepared from reconciled data, not a working file.
Explore service ↗Internal controls and risk
Controls sized to your business, documented and actually tested.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
Our drivers keep paper records. Can each truck still be costed?
Yes. Fuel card statements, toll records, GPS distance and the trip sheet together usually give enough to cost each vehicle. Paper records are digitised into a simple settlement routine.
Should we charge GST forward or leave it to reverse charge?
It depends on your customers and your input costs. The choice is declared for the whole financial year and carries forward until you revert, so it can't be made customer by customer. We set out the effect of each option on your credits and pricing so the choice is made deliberately.
When should a truck be replaced?
When its running cost per kilometre overtakes the cost of financing a replacement. Tracking cost per kilometre by vehicle over time shows that point, which is a far better basis than age alone.
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