Problems of
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THE HAULIER AND CARRIER
S 11
IEXPECT that several readers will have found the need for explanation of some of the items in the tables of cost which I gave in the previous article. Those readers will, I regret, have to wait. I will give that explanation subsequently. I have afforded sufficient information to enable them to make a beginning in keeping their records of operating costs, and that is enough to be going on with. Those who are going on with the scheme will always have the tables by them for reference, and I will give that supplementary explanation later on. For the time being I want to get on a little further with the explanation of the balance of the scheme.
Readers will recollect I stated that four books would be needed, one for recording running costs, one for receipts, one for maintenance expenses and one for establishment charges. This week I want to consider the book in .which records of maintenance expense must be kept.
Why Maintenance Records are Noted Twice.
Someone will probably be objecting here that we have made provision for maintenance in the book that we have already discussed. The answer is that the amounts entered in the other book for maintenance are assumed and are not actual. The reason for going to the trouble to make two entries, one of actual amounts and one of assumed expense, is this: when a vehicle is new, the maintenance cost is low, and it may well happen that a year will pass before anything of importance has on that account to be debited against the vehicle.
The haulier is apt to be misled by that, and to imagine that his actual figures are really a true picture of affairs: that his expenditure on maintenance is never likely to be much more than is exemplified by those early figures.
It is there that the inexperienced haulier goes wrong: it is there that he makes one of his early mistakes in reckoning his costs of operation, and, having concluded that his maintenance costs are practically negligible, he cuts his prices to fit, only to find out, when it is too late, that he has not been charging enough and has not, as a matter a fact, been covering his operating expenses, let alone making the profit he thought he was making. Because, by the time he discovers his mistake, he has spent those imaginary profits, the error is serious.
A System that Prevents Omission.
Now, according to my method he is always aware that, whatever his present expenses may be in connection with maintenance, he must make provision for them according to the scale set down in this book of running costs. If he does not spend that amount on maintenance this week he may have to spend it next, and if he does not spend it this year he will certainly have to spend it next, and so on. Always keep in mind, in considering this unorthodox system of account-keeping, that one of its principal objects is to prevent the haulier from overlooking some of the important and really heavy items of cost, items which, as my experience shows, he is apt to overlook, with disastrous consequences, not only to himself, but also to his fellow hauliers, who have to suffer as the result of the innocent price-cutting which results from his errors of omission. This, of course, often is the case.
Now as to these records of maintenance costs. If the haulier be in a comparatively small way of business one small book, ruled with a cash column on the right-hand side of each page, will suffice for the purpose. It will not be necessary to have one book for each vehicle—we are not getting together a small library in connection with our fleet of vehicles—but it is essential that the cost of each vehicle should be recorded separately.
"Nothing Must be Missed."
The method of entry does not matter much. --The important thing is to get everything down : nothing must be missed. Write at the top of the page, in large letters so that no mistake can be made, " Vehicle No. 1," if the machines of the fleet be independently numbered, and, if not, make use of the registered num
tier, thus, " CM1931." Do not enter on that page anything relating to any other vehicle. If there be others let each have its own page and, when the bottom of any page is reached, carry over to another leaf with a note of the number of that page on which the continuation is to be found.
A Record of Vehicle Performance.
' The entry should include the date, a brief description of the item, and the cost. Make the description as brief as possible, but do not stint that description just because. it is necessary to run on to a second line. The maintenance book should be capable of serving a double purpose, namely, of recording actual expenditure on maintenance and as a valuable source of information as to the behaviour of any particular vehicle.
If one machine, for example, be heavy on brake facings, this book will show it beyond any argument, so that, if it be thought necessary to draw the driver's attention to the fact that he seems to be "driving on his brakes" more than any of the other fellows, there will be proof available, in the event of his denying the soft impeachment, that his use of the vehicle is not all that it should be.
There are other uses of a similar kind to which a proper maintenance record can be put. Most owners will appreciate that fact without being told, and will, moreover, be able themselves to suggest several uses for it.
How the Page Should be Arranged.
Now for an example showing how the page should be completed. Table IV is a sample page from the maintenance-cost record book.
Now the figures in Table IV, which is supposed to be a page of the book for recording maintenance expenditure, are entirely imaginary. That is to say, I have not taken them from any particular user's records. They are, however, not in any sense of the word improbable, and the total is nearer £6 than £5, and that is for little more than one week's operation. True it is that most of them are figures which should not recur again for some time, but it is also true that there are scores of other similar small items which are just as likely to call for entry during those weeks when the foregoing are not needed.
The point is that maintenance casts are always going on and, so far as the majority of non-book-keeping hauliers is concerned, are almost entirely ignored. This book-keeping system of mine will be more than worth while if it induces a few of those fellows to realize what they are losing in that way, and at the same time makes them understand that quotations for haulage which are made without knowing what is being spent on vehicles are quotations which are more than likely to land those who make them in the bankruptcy court. Indeed, that is as often as not the real cause of so many small hauliers reaching that undesirable haven.
Another Need for Noting Expenses.
One more thing, too, before I have done. The income-tax assessor, when he invites the haulier, or, indeed, anyone, to make out his statement of income, expects him to make a true statement, true, that is, in every sense of the word. It is up to the haulier to set down all his legitimate expenses and, amongst those expenses, those in relation to the maintenance of his vehicles are comprised.
If there be no record of that expenditure, it cannot be allowed for in the assessment. Even if the assessor be willing to allow an estimate to stand instead of the actual figures of expense he is certain to cut that estimate down to the minimum. The haulier who has no figures to show therefore stands to lose doubly as the result of his negligence: be loses on his contracts, because he has no figures on which to base his quotations, and he loses on his income-tax by having to pay tax on an income he has never seen and never will see. S.T.R. c47