How to Make a Profit and Loss Statement for Your Truck

A profit and loss statement (P&L) answers one question: after every bill for the truck, what did you actually make? Your bank balance can't tell you that, because fuel, insurance, and repairs land in different weeks than the loads that paid for them. A P&L lines up a period's revenue against the same period's costs.

You'll want one for yourself every month or quarter, for a lender when you finance your next truck, and for your tax preparer at year end.

The three numbers that matter

• Net profit = gross revenue − total expenses. Gross revenue is everything the loads paid before deductions: line haul, fuel surcharge, and accessorials like detention, layover, and TONU.
• Operating ratio = total expenses ÷ gross revenue. It's the cents of every revenue dollar that went back out. At 100% you broke even. Above 100%, you paid to haul freight.
• Profit margin = net profit ÷ gross revenue. It's the other side of the operating ratio. The two always add up to 100%.

If you know your total miles for the period, divide each of these by miles too. Revenue per mile against expense per mile is the fastest way to see whether the problem is rates or costs.

What goes in each section

Revenue. Use what you billed (or what your carrier's settlements show before deductions) for loads delivered in the period. Keep fuel surcharge on its own line so you can see your line haul rate by itself.

Expenses. Fuel, maintenance and repairs, tires, insurance, permits and plates, tolls and scales, lodging, meals or per diem, phone and ELD, factoring fees, and office costs like your bookkeeper and bank fees. Spread annual bills like IRP plates, UCR, and the 2290 over the months they cover, or one quarter will look terrible and the rest will look too good.

The truck payment trap

This is the mistake that makes most homemade P&Ls wrong. A truck loan payment is two things: interest, which is a cost of doing business, and principal, which pays down what you owe. Only the interest belongs in expenses. Your lender's statement shows the split.

The truck's cost shows up instead as depreciation. The IRS describes depreciation as the yearly deduction that recovers the cost of business property with a useful life well beyond one year, reported on Schedule C line 13. Your tax preparer's depreciation schedule has the number, and you can leave it at zero on a monthly P&L if you don't track it. If you lease the truck instead of financing it, the whole lease payment is an expense on your P&L. The Schedule C instructions put vehicle rent or lease payments on line 20a.

The principal still leaves your bank account, so the P&L generator shows it as a separate cash line: net profit, plus depreciation (which isn't cash), minus principal. That's the money actually left over.

Worked example: one quarter

A solo owner-operator ran 30,000 miles in Q3. Revenue:

• Line haul: $60,000
• Fuel surcharge: $10,500
• Accessorials (detention, layover): $1,200

Gross revenue is $71,700.

Expenses for the quarter:

• Fuel $21,600, maintenance $4,200, tires $1,050
• Insurance $3,450, truck loan interest $1,800, depreciation $4,500
• Permits and plates $750, tolls $540, meals $1,800
• Phone and ELD $360, factoring fees $1,434, office $450

Total expenses are $41,934. Net profit is $71,700 − $41,934 = $29,766.

• Operating ratio: $41,934 ÷ $71,700 = 58.5%
• Profit margin: $29,766 ÷ $71,700 = 41.5%
• Revenue per mile: $71,700 ÷ 30,000 = $2.390
• Expense per mile: $41,934 ÷ 30,000 = $1.398
• Profit per mile: $29,766 ÷ 30,000 = $0.992

The loan principal for the quarter was $4,800. Cash left over is $29,766 + $4,500 depreciation − $4,800 principal = $29,466.

One thing to keep in mind: for a sole owner-operator, that $29,766 isn't a salary. It's what the business earned before you pay yourself and before income and self-employment tax. The quarterly tax estimator takes it from there.

Reading your P&L

• Look at the top three expenses. Fuel is almost always first. If maintenance is second, the truck may be costing more than a newer payment would.
• Compare periods, not single months. One big repair can wreck a month. Quarters smooth that out.
• Check expense per mile against your rates. If you took loads below your expense per mile, the P&L will show it. The cost per mile calculator turns this into a number you can use when you book.

P&L vs your tax return

A P&L is a management report. What you can deduct is decided by tax rules, which don't always match your books. For example, the Schedule C instructions say that for people subject to the DOT hours-of-service limits, including interstate truck operators, the deductible share of business meals is 80%, not the full amount. Put the full meal or per diem amount on your P&L and let your tax preparer apply the limits. The per diem calculator helps with that part.