Working with Revenue & Expense Items

In Tailwind, every line item on an Invoice or Bill is assigned to a specific Revenue or Expense Item type. These charge types can help you keep track of costs and income more accurately and automate and standardize certain charges. In addition, consistent use of Revenue Items will make your Invoices that much clearer to Customers, allowing you to identify all those accessorial charges used in the transportation industry, and can also be useful for auditing and reporting purposes.

While Tailwind comes with a small number of default Expense and Revenue Items, these are unlikely to cover all the possible ways you may want to charge your Customers or all the different ways your Vendors may decide to charge you. Consequently, you will eventually want to start adding your own Expense and Revenue Items.

Start by navigating to the Configuration menu via the [GEAR ICON] that appears next to your name at the top right of the page. Next, click on the ‘Financial’ drop-down and select either ‘Revenue Items’ or ‘Expense Items,’ depending on which type you want to add or edit.

Revenue Items

Revenue Items represent all the different things you might want to charge a Customer for and how you might want to do so. Clicking on the Revenue Items option under the Financial configuration menu will bring up a list of your existing Revenue Items.

You can click the yellow edit icon to modify an existing Revenue Item or click on the ‘Create Revenue Item Type’ button to create a new one.

Revenue Items — General Fields

The ‘Name’ field will be used when selecting among Revenue Items elsewhere. The ‘Description’ field will print on your invoices to your customers — while it defaults to a copy of the Name field, it can be modified to help distinguish similarly-named Revenue Items or explain a complicated item in a bit more detail.

You can also indicate whether the Revenue Item in question should be used when calculating a Fuel Surcharge. For example, if you charge Fuel Surcharge by a percentage of your Freight charge, you will want to ensure that the “FSC CHARGEABLE” toggle is on for any Freight-based Revenue Items.

Revenue Item — Units Fields

The various Unit fields let you specify the default values for the new Charge Type. For example, the Units fields will control the default number of units for the Charge Type, and the ‘Unit Rate’ fields will control how much will be charged per unit. The adjacent ‘Value’ fields will add a value to the defaults you have specified.

Revenue Items — Example Items

A Revenue Item with Custom Fields and the Unit Rate set to zero.

The below example shows an Extra Pick Up Charge. The Unit Rate is set to 0, which means you will need to enter the specific charge amount whenever you use this item.

A Revenue Item with Custom Fields and a preset Unit Rate.

This example shows a Tarp Charge, which will charge the Customer a set amount by default. This is useful for Revenue Items for which you have a standard rate. You can always edit the amount on an individual line item if needed.

A Revenue Item using Shipment details — charging the Customer by CWT

This example will show how you can tie revenue items or invoice charges to details of the actual shipment you are providing to the customer. In the Units Default Type, you will find a pull-down and the revenue item or charge for your customer can be based on any of those items you see listed in the pull-down: Charge by CWT, Charge by Ton, Charge by Mile, Charge by number of Skids, etc.

The Units Default gets set to the shipment item to tie to, and the Unit Default Type Value remains at 0. The Unite Rate Default Type remains at Custom, and the Unit Rate Default Value gets set to the amount of money you want to charge per Shipment item in question. In this example, the system will look at the weight of the shipment (divided by 100) and then multiply by $2.30, determining the freight charge based on the CWT of the shipment.

A Revenue Item using Shipment details — charging by Number of Skids

Expense Items

Expense Items represent all the costs your company is likely to incur as part of doing business, whether it be carrier fees, equipment repair, or insurance costs. They also include any costs associated with Personnel, such as commissions for sales reps or payables for drivers. Clicking on the ‘Expense Items’ option under the Financial configuration menu will bring up your existing Expense Items list.

You can click the yellow edit button to modify an existing Expense Item or click on the ‘Create Expense Item’ button to create a new one.

Expense Item Fields

The ‘Name’ field will be used when selecting among Expense Items elsewhere. The ‘Description’ defaults to a copy of the Name field, but it can be modified to help distinguish similarly-named Charge Types or explain a complicated Charge Type in more detail. The Description field is also what will print on reports like Driver Pay Settlement Statements and Vendor Payments.

The various Unit fields let you specify the default values for the new Expense Item. For example, the Units fields will control the default number of units for the item, and the ‘Unit Rate’ fields will control how much will be charged per unit. The adjacent ‘Value’ fields will add a value to the defaults you have specified.

If it is a generic expense item — where the value will be different in every case — you will want to set both type fields to ‘Custom,’ the ‘Type’ value to 1, and the ‘Rate’ value to 0.

Finally, choose an appropriate Category for the Expense Item. These categories are used for some of Tailwind’s reporting features.

Expense Items — Examples

An Expense Item based on Dispatch details

You can configure expense items based on dispatch details like miles travelled to deliver the load or hours spent. These payables are useful to pay company drivers by the mile or by the hour. When creating these types of payables, you will see that in the ‘Units Default Type,’ a pull-down showing all the dispatch details that this payable can be tied to, with the most common being miles or hours. The ‘Unit Rate Default Type’ is left at Custom, and the ‘Unit Rate Default Value’ is set to the amount per mile or per hour you want to pay.

Derivative Expense Items — Revenue/Profit-Based Pay

Sometimes you want to pay your Personnel not based on miles travelled or stops made but based on the actual revenue or profit associated with an Order. Whether it’s a commission for a Sales Representative or a profit-sharing agreement with an Owner/Operator, Tailwind has you covered – but the corresponding Charge Type is slightly more complicated to set up.

First, to ensure that the Expense Item is based on a percentage of the value you will derive, you will want to set the Units Default Type to ‘Custom (Zero)’ and then set the Unit Default Type Value to a decimal representing the percentage. So, for example, a value of ‘0.15’ would be 15%, or ‘0.80’ would be 80%.

Next, you need to tell Tailwind how to pull the value that this percentage will multiply. The Unit Rate Default Type drop-down includes several options for derived value — ‘Revenue,’ ‘Profit,’ or ‘Profit Inc Driver Pay.’ Revenue will pull only from the Receivables on the Order, while the two Profit options will calculate the Profit based on the Revenue and the Expenses on any related Dispatches. (‘Profit’ excludes Personnel-related Payables associated with Dispatches, i.e. Driver Pay.)

Once you have selected one of these options, a list of Receivable or Receivable and Payable Charges will appear below the main form. On the left are Revenue Items used on invoices, and on the right are Expense Items used on bills. The system will take the expense items and subtract those from the revenue to determine the profit of the load. These settings allow you to decide exactly which Revenue and Expense Items will ‘count’ towards Revenue/Profit for this particular payable. You can even decide that certain Revenue or Expense types will only contribute a percentage of their value to the overall calculation.

Once you have selected the relevant Revenue and Expenses and made any changes to the percentages, click ‘Save’ to finish setting up the Expense Item.

Example of a Revenue-based Expense Item

Example of a Profit-based Expense Item

How Many Charge Types Should I Have?

Tailwind comes with a few default Revenue and Expense Items already set up – you may want to edit these items to fit your business better or replace them entirely.

You can set up as many new items as makes sense for your company – remember that the more work you do setting up appropriate, specific types, the faster it will be to quickly create revenue and expense items on your Quotes, Orders and Dispatches.

Clear divisions in Revenue and Expense Items will also help you get the most from Tailwind’s reporting capabilities.

If you set up some commission-based Expense Items, you may also want to set up some Automatic Payables to make use of them.

Setting up Revenue and Expense Items is only one of Tailwind’s many Configuration and Settings options.