Trucking Software Blog

One of the biggest headaches in the transportation business is properly and accurately calculating and reporting road and fuel tax dollars. There are three methods for doing this in the transportation industry right now:

1. Collect all of the fuel receipts from the drivers; insist that the drivers write down the mileage or odometer reading every time they cross a state line, then collect and monitor state mileages; sit down with a calculator and all this paperwork and manually add up gallons purchased for each truck during the quarter – taking care to make sure the gallons purchased in each state are recorded separately; add up all the miles run for the quarter – again, taking care to keep a subtotal of miles by state; calculate the average miles per gallon (mpg), per truck, and the average mpg for the fleet; and finally, fill out the IFTA report forms to determine whether you still owe money or get a credit.
2. Collect all of the fuel receipts from the drivers; insist that the drivers write down the mileage or odometer reading every time they cross a state line; and then deliver all this paperwork to an expensive, outside road and fuel tax preparation service to calculate the above mentioned figures and file the IFTA forms for you (again determining whether you owe tax money or get a credit).
3. Have a good, working transportation management software system that constantly monitors and calculates total miles travelled, gallons purchased, and gives spot and average mpg per truck and fleet – including state by state mileage and gallon subtotals for each truck; and helps file the IFTA forms for you.

What is the cost for each of these methods?

1. What is your time worth? Do you employ someone to take care of all of these receipts, miles, etc? When you consider the amount of time spent and the cost of the time spent hounding drivers for receipts and route mileages, cataloging, reviewing, evaluating and storing the receipts and route mileages, and calculating report figures, this method is the most expensive and the least accurate of the three.
2. The cost of personal time or the time an employee spends managing the receipts, etc. (best guess estimate is at least half of the time required for the method #1), in addition to the cost for the service to perform the calculations, etc. These services can range for $50 to $500 per truck, per quarter.
3. Since the cost of a good software system is spread over all of its pieces (modules), and is usually a onetime purchase (like the TruckMaster Software System), the cost is minimal over time and does not have a recurring monthly or quarterly expense.

Another advantage of the TruckMaster Software System is the interface available with various fuel service providers (Comdata, EFS, TCH, T-Chek, T-Fleet, etc.). It allows fuel purchases to be imported seamlessly into the software. This eliminates fuel purchase omissions, data entry errors and dual data entry.

If you, as a truck owner, want to know the fuel consumption for a given truck or for the fleet at any given time; or if you want the headaches of road and fuel tax reporting to disappear, contact TruckMaster today and we will show you how we can make life easier for you and your staff.

Dale Clark
TruckMaster Solution Provider
TruckMaster Your Trucking Company™

Many people in the transportation industry misunderstand per diem. Per diem is simply reimbursing drivers for meals and incidental expenses incurred while working away from home, but it is complicated by the tax laws. The IRS has created special per diem rules for the transportation industry that differ from regular business rules. Let’s look at some of these rules.

In it simplest form, the driver would save all receipts for meals and incidental expenses while away from home base. When filing tax returns each year, if itemizing, 80% of these expenses can be deducted from gross income.

The IRS, however, has agreed to allow trucking companies to prepay per diem expenses as a non-taxable amount under certain conditions: (1) the company must have an "accountable" per diem plan, (2) the driver must be away from his "home" long enough to require a rest period per the DOT HOS rules, and (3) the driver must have a "home" (if the driver has no permanent domicile he cannot deduct these expenses). If these requirements are met, the per diem amount will be exempt from federal withholding, FICA, and Medicare taxes. If any one of the requirements is not met, the company cannot prepay expenses on a tax free basis. They can still reimburse the driver for expenses if they choose, but it will be reported as regular income.

A plan is considered accountable if: (1) it covers only business expenses, (2) all expenses are substantiated, and (3) the employee is required to return to the employer any prepaid amount over the substantiated amount. Sounds like a head ache right? The IRS however has made it easier by setting a "meal and incidental expense (MI)" amount and as long as the per diem amount is less that this standard amount, rules two and three are considered substantiated. Currently the federal MI amount is $59.00 per day away from home.

Let's take a simple example: A driver is away from home 5 nights and is at home 2 nights per week. Salary is $1000/week including per diem expenses. At the $59 per day amount $236 (59 x 5 x 80%) could be deducted from gross salary before calculating federal withholding, FICA, and Medicare taxes. Instead of paying taxes on $1000, taxes would only be paid on $764. This would benefit both the company and the driver.

The IRS has allowed transportations companies to calculate per diem amounts per, per mile, or as a percent of gross, as long as the total paid does not exceed the $59 per day away from home. If paying per diem as mileage or percentage, this needs to be monitored occasionally to insure that the per diem amount stays below the federal guideline.

There are some negative things to consider however for both the driver and the company.

For the driver:

• If the per diem is being deducted before paying FICA taxes, your retirement benefits may be lower. However, if the tax savings is invested in an IRA or 401K, there is usually a much greater benefit received than from paying additional FICA taxes.
• When applying for a loan, the banks typically look at taxable income. Thus deducting per diem will lower the taxable income showing on the paycheck stub. If the bank uses the 1040 return to find total taxable income, this will not be an issue, as the MI expenses will have been deducted from your 1040 also.

For the company:

• If a company is audited and the IRS finds you have routinely paid drivers more than the standard daily amount, taxes will have to be paid on all per diem paid out, not just on the over payment. It is important to monitor the per diem payments to insure they do not exceed the federal standard.
• There can be administrative costs associated with deducting and monitoring per diem pay. These can be minimized however, by using a good trucking software package such as TruckMaster which makes per diem calculations a simple part of the settlement process.

Talk to a tax advisor before making changes, but generally a company can save a bundle on taxes by paying per diem correctly, plus it benefits the drivers as well.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Trucking Company™

Well, it's that time of year once again.

The holidays are over, and we now get to set our eyes on the next eagerly anticipated date, tax day.

'Tis the season to dig out all of the receipts for the past year, categorize them, add them all up, and enter them into the P&L spreadsheet

Time to spend hours on the phone trying to dig up all of the Tax ID numbers that you're missing from those you've paid money to over the year.

Time to break out the electric typewriter, and set upon filling in all the 1099s and W2s that need to be issued to your employees and carriers.

Time to find out, too late of course, that an asset purchase prior to the end of the year would have saved you big dollars in taxes.

Isn't there a better way? Yes.

Trucking software is the better way. With a good trucking software package, all of your revenue and expenses are entered daily, as you process the day's work load. Each fuel purchase, every road expense, all truck repairs, are categorized as you pay for them (or as you accrue the debt).

In fact, good trucking software will allow you to download automatically many of your road expenses directly from your fuel provider shortly after the purchases occur.

You can see from day to day exactly where you are at for each category year to date. At the end of the year, you press a button and out comes the paperwork that needs to be submitted to your CPA for final approval.

With good trucking software, printing your W2s and 1099s is as simple as sticking the forms in your printer and hitting "print".

Really!

So what's holding you back? Is it the time and money that you're currently investing in a) manually calculating your figures, or b) wasting time with poor trucking software that leaves you doing many things manually anyway? Time to break the cycle once and for all.

'Tis the season.

Greg Dodson
TruckMaster Solution Provider
TruckMaster Your Trucking Company™

Have you ever wondered why you are in the trucking industry or why you choose to stay in it? I believe the last few years have caused many of us to wonder. In some ways, it reminds me of the old joke about the farmer who won the lottery. When the farmer is asked what he will do with his new found fortune his answer is simple; "Oh, I suppose I'll keep farmin' until the money's gone." That has been the prevalent attitude in the trucking industry for the last few years.

Business owners and employees with a career in the trucking industry are there because at some level they love it. At every level, it is challenging work and I believe this has a way of pointing out people who are tenacious, hard working, and love a challenge. Certainly, part of that challenge is to be profitable. Unlike the farmer in the joke, you cannot be satisfied simply waiting until the money runs out. You know you must watch every penny constantly so that some of them will get to the bottom line. This is not the "fun" side of the business. However, it is less painful than having the money run out.

One of the first steps in making management less painful is ensuring that everyone understands that every decision made will produce profit or cost the company money. Employees who realize how their decisions affect company profitability are empowered and make better decisions. Therefore, the question becomes how to provide them with this 'awareness'. You can employ the "caught ya" technique, which, unfortunately, is over used. You catch people making bad decisions and embarrass or berate them hoping the quality of their decisions will improve.

Obviously, this causes problems in the personnel management area. It is also after the fact and it is not proactive. It is preferable to provide people with the information to make the right decisions right from the start. If employees see that you are involved in the business and invested in its success and they see their accomplishments as part of the company’s achievements they will follow, and emulate your positive actions. The action that has the most impact is the company's investment in providing the tools and systems that assist employees when making the company more successful. This can be as simple as providing a decent desk chair, or as extensive as a true, enterprise level, trucking software package.

The investment in time and money to ensure the company and employee success shows commitment, and care for the whole team. It is a way of saying, "We are in this together, and we are going to make sure everyone is working at peak performance, using the very best tools and systems possible." This attitude, this commitment ensures your company will be the very best it can be.

We welcome the opportunity to be a part of your success in 2010. Please contact us today to learn how a TruckMaster System is the best gift you can give your company this holiday season.

Kurtis Brown
TruckMaster Solution Provider
TruckMaster Your Trucking Company™

There are several different choices when it comes to dispatching software, and some are more suited to the small business environment. When it comes to dispatching, we all know how difficult it can be to keep track of all of the loads, drivers, and appointments and while trying to keep all of your drivers and customers happy.

Inside a trucking company there can be many different dispatch departments. Some handle only brokerage, some only company trucks, some only owner operators. There are some smaller companies that don’t have a lot of people but those few people handle everything. In cases where dispatchers run both the company trucks and find outside carriers for their extra freight having a great system that can handle all of these situations is vital.

That's what TruckMaster is all about. Our software is very versatile in being able to handle all of the complex issues of dispatching. When it comes to dispatching, things change every few minutes, from drivers and carriers not being able to take or deliver loads to customers who need loads moved in a hurry.

Inside the TruckMaster dispatch system you are able to:

• Create the load so that you can see it before putting it on a truck. You are able to enter the customer, shipping and receiving information dates and times, weights, comments and your rates to be billed.
• Take that load and put it on a truck whether it is a company truck or outside carrier. If it’s an outside carrier you can rate it and send them a confirmation.
• View all of the available loads that are waiting to be dispatched on a truck or carrier.
• View all of the available loads on the top and all of the trucks and their status on the bottom. From this screen you can select a load and click on the truck you wish to put the load on which dispatches the truck.
• View the status, destination, last call in and PTA of a truck or a trailer.

Knowing where your trucks are at all times is vital and by having a screen specifically to record those check calls from drivers and carriers where they are showing, what they are doing, and if there running on time, as a dispatcher having easy access to tell anyone where they are makes life so much easier, more efficient, therefore more cost effective.

With all of these features that tie dispatching together for both company trucks or outside trucks, TruckMaster Logistics Systems is the trucking system for you. It is easy to learn and easy to use. You are able to keep on top of your loads and able to keep drivers and customers informed. Contact TruckMaster today for a free demo; learn how having a great system can make your life so much better.

Donna Braxton
TruckMaster Solution Provider
TruckMaster Your Trucking Company™