A practical chart of accounts for a trucking company

What a chart of accounts does for a carrier

The chart of accounts is the list of buckets every transaction is sorted into. Each invoice, bill, fuel purchase, settlement and loan payment lands in one or more of these accounts, and your balance sheet and income statement are simply the totals.

A chart built for trucking answers the questions an owner actually asks: is the fuel surcharge covering fuel, what do tires and repairs cost per truck, how much of revenue goes to owner-operators, and how much does the office cost to run. A generic chart with one "Vehicle expenses" line and one "Sales" line cannot answer any of them.

It also matters at year end. In Canada, corporations report their financial statements to the Canada Revenue Agency using the General Index of Financial Information (GIFI), a list of standard items each with its own code. Your accountant maps every account in your chart to a GIFI item, so a chart that is clear and consistent makes that mapping quick.

How to number and group your accounts

Most small and mid-sized carriers do well with four-digit codes grouped by type. Leave gaps between numbers so you can add accounts later without renumbering:

• 1000 to 1999: assets, from bank accounts and receivables to trucks and trailers.
• 2000 to 2999: liabilities, from payables and sales tax to equipment loans and escrow.
• 3000 to 3999: equity, share capital and retained earnings.
• 4000 to 4999: revenue, split by kind of charge.
• 5000 to 5999: cost of revenue, the direct costs of moving freight.
• 6000 to 6999: operating expenses, the overhead that exists whether or not a truck moves.

The GIFI itself is organised the same way: the CRA tells corporations to choose balance sheet items from the 1000 to 3849 range and income statement items from the 7000 to 9970 range. Your own codes do not have to match the GIFI codes; they only need to map to them cleanly.

Two rules keep a chart useful. First, create an account only if you will look at its total separately: a fleet that never compares tractor and trailer repairs does not need both. Second, never use one account for two different kinds of thing because it is convenient this month; you will be untangling it at year end.

An example chart of accounts for a trucking company

The table below is a starting point for a Canadian carrier with company drivers, some owner-operators and a mix of Canadian and US freight. Rename, add or remove accounts to suit how you operate.

Revenue: split it by kind of charge

Booking every invoice to one sales account hides the most useful number in trucking: how much of your revenue is fuel surcharge. With linehaul and fuel surcharge in separate accounts, you can compare fuel surcharge revenue against the fuel account each month and see whether your surcharge table keeps up with the pump. Accessorials in their own account show which customers cost you hours at the dock. If you also broker freight, give brokerage revenue its own account so it is never mixed with revenue from your own trucks.

Cost of revenue versus operating expenses

Cost of revenue holds the costs that rise and fall with the miles you run: fuel, driver pay, owner-operator settlements, repairs, tires, tolls, permits and the insurance on your trucks. Operating expenses are the overhead that stays even when trucks are parked: office staff, rent, software and professional fees. Revenue less cost of revenue is your gross margin, and it is the number to compare per load and per truck. For how these accounts turn into a cost per mile, see trucking cost per mile.

Keep owner-operator settlements in purchased transportation, not driver wages. Contractors are not employees, their settlements carry no source deductions, and mixing the two makes both your payroll records and your margins harder to read. See driver settlement statements for what goes on each.

Liabilities that are really someone else’s money

Three balances in a trucking company look like cash in the bank but belong to someone else. Give each one its own liability account so it never ends up counted as revenue or spent by accident.

• GST/HST payable. The tax you charge on freight is not income. The CRA describes GST/HST collected from customers, along with payroll deductions, as funds held in trust for the government, and it examines those trust accounts separately from a regular tax audit. Record the tax on each invoice to GST/HST payable and the input tax credits on your bills against it. See GST/HST for trucking companies.
• Payroll deductions payable. Income tax, CPP and EI deducted from employees’ pay, plus your employer share, sit here until you remit them. A balance that grows month after month is a warning sign.
• Owner-operator escrow. Escrow or maintenance reserves you hold from contractor settlements are owed back to the contractor under the lease. In the US, federal leasing rules require the lease to state the escrow amount and what it can be used for, give the contractor an accounting on request, pay interest on the balance at least quarterly, and return the fund no later than 45 days after the lease ends. In Canada, the lease agreement sets the terms. Either way, it is a liability, and a separate bank account for escrow funds makes it easy to prove the money is there.

Equipment loans belong here too. Split every loan payment: the interest is an expense, and the principal reduces the loan liability. Booking the whole payment as an expense overstates your costs, understates your profit and leaves a loan on the balance sheet that never goes down.

Equipment, depreciation and capital cost allowance

A tractor or trailer is an asset, not an expense in the month you buy it. Record its cost in the equipment account and its depreciation over time in the matching accumulated depreciation account. Your financial statements use book depreciation, a method your accountant chooses to spread the cost over the equipment’s useful life.

For income tax, Canada uses capital cost allowance (CCA) instead, with rates set by class. According to the CRA:

• Class 16 (40%) includes freight trucks acquired after December 6, 1991, that are rated above 11,788 kg, a description most highway tractors meet.
• Class 10 (30%) also includes motor vehicles, as well as some passenger vehicles.
• Class 54 (30%) and Class 55 (40%) hold eligible zero-emission vehicles; a zero-emission truck that would otherwise be Class 16 goes in Class 55.

Trailers and other equipment have their own classes; your accountant assigns each asset. CCA is mostly calculated on a declining balance: the rate applies to what is left in the class each year. In the year you buy equipment, you can usually claim CCA on only half of your net additions to a class, which the CRA calls the half-year rule, although the accelerated investment incentive suspends that rule and increases the first-year claim for eligible property that becomes available for use before 2028, with a phase-out that has already begun. You do not have to claim the maximum CCA in a year, and selling equipment can create a recapture added to income or a terminal loss.

Common chart of accounts mistakes in trucking

1. Fuel and repairs in one account. They behave differently and need different fixes. Separate fuel, repairs, tires and maintenance from the start.
2. Diesel mapped as heating fuel. In the GIFI, the item called "Fuel costs" describes fuel for heating and cooking, while motor vehicle fuel and tires are listed under "Vehicle expenses". Tell your accountant how your fuel accounts should map.
3. Owner-operator pay as wages. Settlements belong in purchased transportation, and escrow belongs in a liability.
4. Sales tax in revenue. Invoices posted gross to revenue make your sales look bigger and your GST/HST return harder.
5. US dollars mixed with Canadian. Keep a separate USD bank account in the books and record exchange gains and losses, instead of adding the two currencies together.
6. Too many accounts. A separate account for every vendor or every truck makes reports unreadable. Use classes, units or tags for trucks, and keep accounts for kinds of cost.
7. Personal spending in the business. Record it as a shareholder loan or draw, not as an expense.

Review the chart once a year with your accountant, ideally after your year-end, when the mapping problems are fresh. For the routine that keeps these accounts accurate every month, see month-end close for trucking companies.

How TruckerPro Finance handles it

The Advanced plan includes a general ledger with a chart of accounts, journals and period close, and once your books are set up it produces a trial balance, balance sheet and income statement.

The chart of accounts starts with the usual trucking expense accounts already in place, numbered the same way as the example above: purchased transportation, fuel, tractor and trailer repairs, tires, truck and trailer insurance, permits and licensing, IFTA and fuel tax, tolls and scales, equipment lease, loan and lease interest, and factoring fees, plus an equipment loans payable liability. You can rename them and add your own asset, liability, equity, income and expense accounts. Once an account is a system default or has amounts posted to it, its number and type are locked so past reports are not restated by accident.

Bill lines are coded to these accounts, and a financed equipment payment is split so that the interest goes to an expense account and the principal reduces the equipment loan. If your accountant works in another system, the Plus plan syncs with QuickBooks Online (customers, vendors, invoices, bills, payments and credits), Xero (invoices, payments, bills and credits), Sage Business Cloud Accounting (invoices, bills and payments) and Wave (invoices only). Read more on reports and integrations, or compare the plans.