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Accounting for Logistics & Transport
The road transport and logistics industry is a big part of the Australian economy and contributes 3.1% of GDP. In fact, the latest statistics suggest Australian logistics is a $94 billion industry comprising road, rail, air and sea freight, together with warehousing and handling. The industry continues to grow with the increase in population and economic activity and some states forecast freight movement tonnages will increase at a greater rate than the population.
Road transport dominates movement of freight around the country and it is a critical link in the increasingly complex chain that moves freight from ports and terminals and distributes it to warehouses and retail outlets. Success in road transport can be a 'long haul' and information technology and customer demands are driving a more integrated approach to logistics management with widespread use of real-time freight tracking through electronic monitoring and messaging systems installed in transport vehicles. The road freight industry has become more complex in recent years with the introduction of some sophisticated technology in trucks, loading systems and office systems and while the capital investment of a road freight business is probably at record levels, finance remains tight in the post GFC era.
The road freight industry is highly competitive and smaller operators have little influence over key costs such as fuel and labour or the price they are able to charge their customers. They are price-takers and even some of the large operators struggle to differentiate their services from those provided by a large number of owner/drivers and small operators who drive down price by engaging in price-led competition. It is a highly competitive industry and both customers and the broader community expect the highest standards of safety and efficiency. The competitiveness of the industry is reflected in low industry returns with average profitability of just 6.2%. It is a fine line between success and failure and road freight operators must measure and understand their costs and have an accountant who understands their industry.
Industry particpants like interstate drivers, long haulage contractors, couriers and taxi truck operators all face issues like road congestion, fuel excise, maintenance and fluctuating fuel prices. The pressure of deadlines means safety and fatigue remain big concerns as does increased regulation for all prime movers and trailers under the guidelines of the National Heavy Vehicle Accreditation Scheme. The industry is also not immune from staff turnover and rising operating costs. While the industry spans a wide range of participants from one truck, owner-drivers through to large national fleets, they all face long hours. It's no surprise that bookkeeping and administration often don’t get the attention they deserve and while GST, BAS and tax payments often represent some of the largest financial obligations for a road transport business, many end up paying too much tax and incur fines for non-compliance.
Having an accountant who understands the mechanics of the road freight and logistics industry can give you a serious competitive edge. Over the years we have attracted a number of road and freight transport clients who all have to deal with the usual small business compliance issues of GST, BAS, PAYG and superannuation. However, we believe you want more than just tax compliance services which is why we provide advice on cash flow management, finance and wealth creation. Over the years we have mentored dozens of transport businesses through the various stages of their business life cycle from start up right through to sale and we offer you experience, technical tax knowledge and most importantly, an intimate understanding of your industry.
STARTING OR BUYING A TRANSPORT BUSINESS?
As a business start-up specialist our team of accountants have helped dozens of truck and transport business owners get their business off to a flying start. We offer you experience, technical tax knowledge and most importantly, an intimate understanding of your industry.
Starting a business is a bit like building a house. You need solid foundations including the right taxation structure, accounting software, insurances, a marketing plan, website and a social media presence. Your choice of business structure is critical and there are a number of different options such as company, sole trader, partnership and trust. When selecting a business structure asset protection is a key consideration as well as your family situation, forecast level of profit and your future plans regarding the admission of new business partners.
Accounting software is another brick in your foundation wall and the wrong choice can be catastrophic. Poor financial records are one of thebiggest causes of business failure in this country and up to date, accurate financial records let you make informed business decisions. Your software program needs to match your business needs with your level of accounting skill because too many business owners use sophisticated double entry accounting programs and produce 'computerised shoebox' records. One of our priorities is to help you minimise the cost of compliance which in some cases includes training you to use the software. We support a range of programs but have a preference for cloud based solutions like Xero.
To build a house you also need the right tools and when 'constructing' your business we have developed a number of tools including a start-up expense checklist that dissects your start-up costs into categories like equipment, IT costs, professional fees, marketing costs and a website. These figures then slot into a cash flow budget template and form the basis of your first year profit and loss projections.
We will offer you advice on how best to finance your prime mover, truck or trailer and make sure you understand the different tax treatment of a lease compared to a chattel mortgage. Through our affiliate partners we can also assist you to obtain finance at highly competitive rates.
MARKETING YOUR BUSINESS
Most business owners rely on their reputation and referrals to grow their business. While these ingredients remain important, you need to shift your marketing focus online because increasingly local searches like ‘Transport Service Pakenham’ are driving traffic to your website. In many cases your website is the first touch point with a potential new customer and you only get one chance to make a good first impression. For your industry, your website and your marketing can be the difference between boom and gloom.
One of our biggest points of difference compared to other accounting firms is our marketing expertise. We can assist you with your branding (business name, logo and slogan) and help you harness the power of social media to win more referrals. Over the past few years we have worked with dozens of clients to help them create affordable, quality lead generation websites. We'll make sure your website is responsive to smart phones and tablets and provide advice and guidance with your website content including video production. If your website lacks calls to action or lead magnets we'll help you build them plus we'll introduce you to strategies like re-marketing and search engine optimization to drive more traffic to your website.
The marketing process begins with your branding and we have worked through the process with dozens of clients over the years and using some online resources we can help you build a modern brand that resonates with your target market. We can even help you develop your stationery at a fraction of the cost of engaging a graphic artist or marketing consultant.
We recognise the fact that business owners want more sales, more customers and more profit so we also give you access to one of the world’s most successful marketing programs, the ‘Business Growth System’. It contains details of more than 80 breakthrough marketing strategies supported by videos, templates and checklists. Access to this ‘vault’ of resources would normally cost you $500 per month ($6,000 per annum), however, as a client of the firm you get unlimited FREE access. In addition, you also get FREE access to the ‘Grow Your Business in 5 Days’ video training course that could have a massive impact on your future business growth.
If you aren’t using some of these marketing techniques your business probably won't reach its full profit potential. In summary, our business advisors offer trucking clients a range of tailored business solutions including:
- Start-Up Business Advice for your Transport and Logistics Business
- Spreadsheets and Tools including a Start Up Expense Checklist
- Advice and Establishment of Your Business Structure taking into account issues like Asset Protection, Tax Minimisation and Future Discount Capital Gains Tax Concessions
- Business Registrations including ABN, TFN, GST, WorkCover etc.
- Preparation of Business Plans, Cash Flow Forecasts and Profit Projections
- Accounting Software Selection and Training – Bookkeeping, Invoicing & Payroll
- Preparation of Finance Applications & Bank Submissions
- Preparation and Analysis of Financial Statements
- Bookkeeping and Payroll Services
- Tax Planning Strategies
- Industry Benchmarking and KPI Management
- Advice and Assistance with Websites - Development, Content and SEO
- Personal Financial Planning & Wealth Creation Strategies
- Business & Risk Insurances including Income Protection and Life Insurance
- Vehicle and Equipment Finance (Chattel Mortgage, Lease etc.)
- Monitoring and Controlling Labour Costs
- Recession and Survival Strategies
- Business Succession Planning
You'll find we are so much more than just tax Accountants. We are business advisors and profit builders who genuinely care about the success of your transport or logistics business. We service the needs of a number of road, rail, air and sea freight operators and offer you strategies to grow your business, your profits and your wealth. Transport, trucking and logistics have become a real niche within our accounting practice and if you’re looking to get your business off to a flying start or want to grow your existing business, contact us today.
If you're a committed and ambitious transport and logistics business owner looking to accelerate your business success we invite you to book a FREE, half hour introductory consultation to discuss your business needs. You can expect practical business, tax, marketing and financial advice designed to help you build your business and grow your wealth. To book a time, call us today on (03) 5941 4868 or complete your details in the box at the top of this page.