In addition to having expense accounts in the General Ledger file for Unit Cost Development, carriers should include all revenue accounts in that file as well. Revenue accounts can then be included in the account mapping, so as to have a comparison on the Traffic/CIS cost reconciliation report.
This revenue mapping should also recognize any “other” revenues that are not related to your freight operations. These are revenues that would not appear in your shipment data as revenue for freight (either regular shipment revenue, fuel surcharge revenue or accessorial revenue) but are for other miscellaneous activities, if they exist.
If the corresponding costs for these other revenues are available, then both should be excluded from Unit Cost Development (map to Category 0). If, however, such costs are not available, then the revenues should be mapped as an offset to the primary cost category. This can include:
· Maintenance Billings – revenue received from performing maintenance for other carriers, owner operators, or other outside parties should be mapped as a reduction to maintenance expense.
· Equipment Rentals – revenue from renting trailers or other equipment to outside parties should be mapped as an offset to depreciation expense.
· Fuel Rebates – this is not fuel surcharge revenue, but discounts from fuel suppliers. This should be treated as a contra-fuel expense, and thus mapped to linehaul and P&D fuel cost categories (with a reasonable split between the two activities, if material).
Any revenue earned by your company that is not related to freight movements should be scrutinized to insure that the corresponding cost, or, if not available, the revenue as an off-set, is backed out of expenses so as to not distort the evaluation of your core transportation business.
Copyright (c) 2008 Transportation Costing Group, Inc.