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For Retail and Transportation Companies

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Accounting and Advisory Services

For Retail and Transportation Companies

Bookkeeping and finance play a significant part in a company's success. Even if a business achieves its budget objectives, there is no opportunity for expansion unless those objectives can be enhanced. Expanding transportation businesses struggle to develop well-tuned bookkeeping procedures, particularly when systems evolve to accommodate the increasing activity. To assist transportation businesses in better understanding specific fundamental bookkeeping processes, we have made the following guide:

1. BOOKKEEPING PROCEDURE

For revenue and expenditure accounting, there are two main options:

  • The cash method
    According to the cash method of accounting, revenue is recorded when cash is received, and expenditures are recorded when cash is spent. It does not, however, always provide a complete and accurate view of a business's activities.

  • The accrual method
    Revenue is recognized when the risk and reward of the transaction are transferred, regardless of when the cash is received; Accrual accounting records the trades when it has occurred, not necessarily when it is paid. The accrual method of accounting gives a more comprehensive and accurate view of a company's activities since it aligns expenditures with revenue.

Having access to financial metrics that provide vital information about how your company is doing is one of the essential aspects of trucking accounting. The average cost-per-mile is the most significant statistic for trucking firms.

To figure out your cost-per-mile, start calculating the average number of miles travelled in a given month. Then divide this figure by your fixed and variable expenses to obtain an average cost per mile for each category. When you add them all together, you'll receive your overall cost per mile of conducting business. MileIQ is one of our most recommended apps readily available online and an excellent calculator for calculating your cost-per-mile.

2. INVENTORY OF FUEL AND PARTS

Inventory is often linked with retail companies and refers to a product intended to be sold to consumers. On the other hand, transportation businesses may have inventory, but it will be in the form of goods used in the provision of services. Fuel, parts, and other supplies may be among them. According to the accrual method of accounting mentioned above, inventory is an asset to the business and is not recognized as an expenditure until it is utilized.

Many responsibilities, including the bookkeeping department, are managed and balanced by retail and transportation business owners. Hiring more people is one way to alleviate the load. Without the appropriate knowledge, supervision, and direction, this approach may be unsuccessful.