Sample Chart of Accounts for a Small Company

By convention and necessity, the main purpose of accounts is to categorize transaction records in a way that facilitates the retrieval of financial and tax information from them. In fact, most financial reports are simply summaries of account balances or account activity. For example, a Profit and Loss Report like the simple one on the right only shows the total income and expense accounts for a certain period of time; a month in this case. Understanding a company’s financial health goes beyond just analyzing its assets. Liabilities, the financial obligations a company owes to external parties, provide a comprehensive view of its financial standing. In financial statements, liabilities are broadly categorized into current and non-current, each displaying various aspects of the company’s financial commitments.

• According to Kevin Rutherford, an owner-operator accounting software creator, only 10% of owner-operators actually know their own cost per mile.
• The Gains and losses account in the chart of accounts is where a company records any profits (gains) or losses it experiences.
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• It also manages employee and contractor paperwork like W-2 and 1099 forms.
• Last but certainly not least, it’s always a good idea to hire a CPA for help with tax preparation and trucking accounting services.

But ultimately, how effective it is in informing your decision-makers and ensuring an efficient record-to-report process is up to you. So take our template, along with the many insights and tips we’ve discussed, and build a COA that drives real success for your organization. Every company is different so, depending on your operations, industry, and other critical factors, the template is only as good as you make it. Now, that said, we’d be remiss if we didn’t boast a bit and say that Embark’s COA template is a heckuva starting point.

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Here’s what you need to know about trucking accounting, including how to set up an effective system and some common mistakes to avoid. If a company’s contribution margin is increasing, they are reducing their variable cost. This is also a way to measure if your variable cost is increasing or decreasing as sales revenue goes up. That doesn’t mean recording every single detail about every single transaction. You don’t need a separate account for every product you sell, and you don’t need a separate account for each utility. In accounting, each transaction you record is categorized according to its account and subaccount to help keep your books organized.

• Fuel cards can automatically track, organize, and display the information you need to fill out your IFTA expense reports.
• If you take a block away from one section of your business, you have to add it back someplace else.
• ProTransport customers are provided with phone and email customer support.
• The challenge for haulage and freight companies is an increased demand for delivered goods within shorter timeframes than ever before.

Therefore, a well-formed and organized COA allows you to draw a direct line between a transaction and how it flows into your financial statements. As a slight aside, it’s also important to keep in mind the relationship between your COA, GL, and financial statements. It’s actually your COA that comes first in the data chain, where your categories and identifiers funnel transactions into the ledger, which classifies them accordingly.

What Is Amortization Expense? The Difference Between Amortization and Depreciation

Add the gallons of fuel in the memo area of International Fuel Tax Agreement (IFTA) fuel bills so that you can calculate your gallons for IFTA reporting purposes directly from your QuickBooks company file. First, if they’re not already set up, create expense accounts specifically for IFTA fuel. When entering bills for IFTA fuel, enter the gallons as a number in the memo area of the bill. Be sure to enter only the gallons in the memo area, without any additional wording, to allow for the calculation on the report.

For example, if you have unneeded categories in your COA, it’s usually not a good idea to eliminate them mid-period due to possible orphaned data in your financial statements. These accounts equate to the equity value remaining in your business after deducting your liabilities from your assets. In short, this is a way to measure how valuable your organization is to its owners.

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Using trucking jargon like reefer, deadhead, TONU, hot shot loads, and alligator can sound like a totally different language to people not in the trucking industry. While accounting words like assets, equity, and expenses seem foreign to most truckers. According to Kevin Rutherford, an owner-operator accounting software creator, only 10% of owner-operators actually know their own cost per mile. There is a big difference between knowing a lot about trucking and knowing a lot about how to have a successful trucking company.

The software places a top focus on translating costs into per-mile calculations. This focus is intended to make it easier to calculate load values and stay on top of receipts for tax filing. While available for businesses of all sizes, Rigbooks is designed for owner operators and small fleets.

How is a chart of accounts organized?

In the Excel report, format the memo column to a number format and sum the column. It is important to have different account categories for truck purchases, repairs, and truck loading and unloading tools. While Quickbooks can be used for trucking companies, some trucking-specific features are missing creating your time such as cost-per-mile calculations and IFTA reporting. However, some companies use other solutions for those tasks and find Quickbooks meets their accounting needs. Trucking companies may take very different approaches to bookkeeping depending on their size, time in business, and plans to expand.

Chart of Accounts examples:

However, keeping a running tab of your fuel expenses allows you to calculate your trucking companies cost per mile, which is explained in more detail here. Knowing your cost per mile is critical for choosing the right loads that are going to provide income for your business. The starting point for trucker accounting 101 is to understand how much money is coming into and going out of your trucking business. To better explain this process, we will define the following words in laymen’s terms; revenue, expenses, profits, and net income.