1. Switch to accrual accounting to improve precision and compliance

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Cash accounting might work well for small owner/operators, but growing fleets need the precision of accrual accounting. This method of accounting records income when it’s earned (e.g. when a load is delivered and the shipper is invoiced) and expenses when they’re incurred (like fuel purchases), even if payment hasn’t exchanged hands yet.

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For example, if you invoice a shipper in March but receive payment in April, accrual accounting will reflect that income in March, aligning with the service period. This approach offers a clearer view of the financial health of your business, especially for fleets managing multi-month contracts or delayed payments. 

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Why accrual accounting is important for fleet owners:

• Provides insights into the true financial health of your business by matching revenues with related expenses, even across billing cycles.
• Simplifies compliance with Generally Accepted Accounting Principles (GAAP).
• Simplifies forecasting, helping you anticipate tax liabilities or seasonal cash crunches.
• Provides accurate data for securing loans or attracting investors.

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Tip: Pair accrual accounting with tools like Denim’s Integrated Ledger for batch accounting to automate transaction logging and reduce manual errors.

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2. Automate expense tracking with integrated fuel card data

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Fuel costs can consume 24% or more of a fleet’s budget (ATRI, 2024), but these expenses are often manually recorded. This manual data input is time-consuming and leaves room for errors and fraud.

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Integrating your fuel card data into your bookkeeping system gives fleet owners an easy way to manage and track fleet-related expenses efficiently. Using an integrated system combined with GPS tracking, fleet owners can track the vehicle, location, date, and time of filling, as well as the total amount of fuel pumped.

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This automated tracking makes it easy to identify if a fuel card is being used fraudulently (ex: if a card skimmer stole your driver’s card data at a pump), and gives fleet owners real-time insights into spending. These insights let you analyze spending patterns to identify inefficient routes, excess costs for particular vehicles, and more.

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Fuel card integrations also make it easy to set spending limits and simplify International Fuel Tax Association (IFTA) reporting and compliance.

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3. Perform quarterly financial audits & strengthen internal controls

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Regular financial audits and solid internal controls can make the difference between a fleet's spending spiraling out of control and an accurate and efficient bookkeeping system. Fleet owners should perform regular audits of their finances and important documentation to ensure compliance, and utilize strong internal controls to prevent fraud, reduce errors, and improve efficiency. 

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Tips for creating internal controls for fleet owners:

• Separate administrative functions like invoicing and payment processing from operational functions.
• Ensure no one person has control over all financial activities.
• Perform monthly reconciliations to match bank statements with ledger entries.

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In addition to creating strong internal controls, owners should consistently audit important documentation like permits, insurance, vehicle registrations, and driver training certifications to remain compliant and avoid unnecessary fees and fines.

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Financial audits and controls aren’t just about catching mistakes, they’re also opportunities to refine processes and improve efficiency.

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4. Optimize cash flow with strong accounts receivable practices:

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Late payments are more than just an inconvenience, they hurt your cash flow and profits. Established fleets need strong accounts receivable practices to maintain liquidity. Here’s how to optimize your processes to improve cash flow and profitability.

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1. Invoice promptly using automation: According to PYMNTS, businesses that use automated invoicing tools have DSO (Days Sales Outstanding) averages 23 days shorter than companies using traditional invoicing methods - a 29.5% improvement over manual invoicing.

2. Set clear payment terms and billing procedures: Set clear standards for your customers and internal record-keeping procedures. Setting (and sticking to) your payment terms is an essential part of getting paid on time. Be consistent with any incentives you offer for early payments and penalties for late payments.

3. Set clear collections policies and procedures: Create proactive processes to address overdue accounts, and use automation as much as possible to remind customers about upcoming payments.

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Managing accounts receivables takes time and resources, but freight factoring companies like Denim automate the process—cutting manual tasks by 75%. Hundreds of freight brokers trust Denim to collect on their invoices and use automation tools like early invoicing to lower DSO. Learn how Denim can streamline your operations.

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5. Track profitability per truck and driver, not just per load

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Without breaking down which trucks are most profitable, your best drivers might be subsidizing several less profitable ones. Break down the profitability of each truck by calculating the following essential metrics:

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• Cost Per Mile: (Fuel costs + maintenance costs + driver wages)/Loaded miles
• Revenue Per Operable Hour (RPH): Total load revenue / (Total operating hours - maintenance downtime)
  
  

With these two metrics you can quickly identify the most profitable trucks, and which are costing the most to operate. You may notice some outliers in fuel and maintenance costs with some vehicles, or additional downtime with specific drivers, which will reduce your revenue per hour.

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In these cases, consider making some upgrades to your fleet based on the research done by the North American Council for Freight Efficiency (NACFE). They’ve studied dozens of different ways for fleets to improve fuel economy, from adding aerodynamic devices like skirts or wheel covers, rear devices, underbody devices, and gap devices to trailers, adding inflation monitoring systems to tires, and more.

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These practices can improve fuel savings by upwards of 16%. If your trucks are struggling with high costs per mile, consider implementing some of these tactics.

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6. Leverage trucking-specific accounting expertise

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Generic CPAs can miss tens of thousands of dollars in deductions every year during tax season due to the specialized nature of the industry. Consider hiring a CPA who specializes in the trucking industry to maximize your savings.

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A specialized accountant can help fleet owners save on taxes through industry-specific tax strategies, like combining Section 179 deductions with bonus depreciation for vehicle write-offs, optimizing IFTA tax credits to reclaim any overpaid fuel taxes across state lines, and more.

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7. Centralize your data with an integrated TMS and accounting platform

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Siloed systems can make reconciling accounts a nightmare. By integrating your TMS with your accounting tools you can eliminate redundant data entry in multiple software systems, cut down on errors, and get a better picture of the financial health of your business.

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Case Study: With the added efficiency of an integrated AP/AR solution Alliance Logistix saw a 35% increase in month-over-month volume.

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Conclusion

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Improving your fleet’s bookkeeping isn’t about making more work for your back office, it’s about building smarter systems that keep your business running smoothly. By adopting accrual accounting, automating fuel expense tracking, and leveraging integrations, established fleets can grow their business and stay on top of their finances with ease.

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Ready to modernize your accounting with automation, reduced ledger clutter, and improved visibility? Get started with Denim today.