Trucking companies do make a lot of money, but that is before calculating the major expenses essential for running their business. Trucking companies make various significant purchases, and handling your finances well is the key to your success. Williams Accounting and Consulting can help you track your transactions, income, and expenses.
In this blog, we are going to list some of the major expenses that occur in a trucking company.
Types of owner-operation expenses
- Truck purchase/lease.
If you are leasing a truck, making payments for it every month might be your biggest expense. Purchasing one or more trucks to add to your company requires a substantial amount of money as well.
Since trucking companies require trucks to constantly be on the road for shipping and picking up goods, they spend a good deal of money on fuel. A trucking company spends around $30,000 to $60,000 alone on fuel on an overage.
- Maintenance and repair.
Purchasing a truck is not where your expenses towards it end. Keeping up with its maintenance and repairs is also crucial for trucking company expenses. Since trucks are almost always on the go and travel for several hours on the road every day, they often demand maintenance and repairs. An average trucking company spends around $14,000 on repairs.
- Annual licensing, permits, and documentation.
Annual licensing, permits, and creating essential documentation for your trucks is a crucial part of your trucking company, and these things do not come for free of cost. Some of them include:
- Renewal fees
- Vehicle inspections
- Business licenses
- Transport permits
- Registration fees
Insurance is a mandatory expense that can vary greatly depending on which plan you choose. The insurance for a single truck starts at around $3,000. Since trucks are prone to catastrophic accidents, most trucking companies have an occupational accidents and physical damage in their coverage. Apart from that, health insurance costs around $3,400 on average.
We are all aware that the more you put your tires to use, the more they go through wear and tear. Since trucks are always on the go and spend hours on the road, trucking companies spend a good deal of money on tires. A single tire can cost as much as $250. Showing negligence towards tires can result in a catastrophic and life-threatening road accident. Therefore, there is little one can do to reduce these costs.
Taxes are another big part of a trucking company’s expenses. It is possible to reduce some corporate taxes, but it is best done with the help of professional Williams Accounting and Consulting services to avoid inviting legal trouble.