Checks and Balances

Murray Pratt Blog, Business Insights Leave a Comment

Words associated with Accounting

‘There are 3 types of Accountants. Those who can count, and those who can’t!’

Now you can appreciate why I spend my time more in the ‘customer facing’ areas of the business. I have worked with a number of ‘Beans’ (business slang for Bean Counters) in the past and I have found them to be extremely valuable coaches. In one job I would go and meet with our CFO every morning and get some insight, or update, on the business.

I realized then, that as an executive managing around 200 people, that I had to make sure I had the levers on the key expenditures in a business. I found that the 80/20 rule applies very well in this context. You really need to focus on those operational costs that you can control, and in almost all cases one of them will be your labor costs. In the trucking business the second would certainly be fuel.

I also realized that I needed to make sure that individuals on the management team were accountable for certain line items. So I would go down the income statement and put a manager’s name beside a particular line item. And if I couldn’t attach someone to a particular line item, or they didn’t understand that they were responsible for that line item, or did not really understand what they could do to impact that line item…I would take action.

We sell trucking software and freight brokerage software. It has a number of checks and balances to help out a trucking and freight brokerage businesses.

First and most obviously, it has an Accounting utility that allows you to Invoice customers and manage your Receivables. You can check to see if your invoices have been paid (balances outstanding from customers, and your overall balance).

Second, the Accounting  utility allows you to make payments to suppliers and vendors. Freight brokers can pay Carriers out of the system and you can print checks out of it. You can also manage your Accounts Payable out of the system. You are even able to produce reports for driver statements and summaries.

However, the biggest check and balance in the system is the way the Tailwind application ties the Operational and Administrative sides of the businesses together. It’s the checks and balances in place between your Sales & Dispatching groups, AND your Accounting group, that helps you manage your cash flow and ultimately, your profitability.

I hear from customers all the time that they are having to chase down their drivers to get the signed Proof of Delivery (POD) so that they can invoice the customer. Or they are worried that a driver has lost the POD somewhere in their journeys, eating up valuable time before invoicing the customer. To go through all the work of picking up and dropping off a load, spending the money on fuel and labor and not invoice for it – well, I shudder at the thought of these types of losses incurred by a small business. In the trucking industry it’s tough to make a buck. I’d like to think that our system, at approximately $3 a day in cost, quickly pays for itself as you can easily maintain the accountability in your business between what you delivered, and you what you invoiced & collected.

Most importantly a trucking software system gives you an audit trail, a history of all of your activities on a load, so that you can make sure that what you delivered, in fact, gets invoiced and paid by your customers.

With a trucking software system or a freight brokerage software system, you will always have the necessary checks and balances in place that will…

  • Hold your driver accountable for delivering their PODs
  • Hold your staff accountable for invoicing customers
  • Hold yourself accountable for paying your drivers
  • Hold your customers accountable for paying for your services.


And in the ‘fog of war’ – the daily carnage that can occur in running a trucking business, it’s nice to have a solid trucking software system in place to help you along the way.

 

 

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