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managemen matters
Page 94
Page 95
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Economic consultancy the Haulcost plan
AN EASILY OPERATED costing scheme designed especially for road haulage operators, and including the opportunity for participating firms to obtain consultancy advice, has recently been launched by Howard, Packham and Associates (Consultants) Ltd. Mr Philip Packham, managing director of HPA, made a considerable reputation in road transport circles when he devised some effective incentive schemes which greatly boosted productivity of drivers and depot staffs at A. Packham and Co Ltd.
When his family business was sold to the Miles Druce organization, Philip Packham, with colleagues, launched into business consultancy. The Haulcost plan stems directly from the firm's consultancy experience in road transport.
The scheme is designed to provide operators with control over the key points governing profits and cash flow. It utilizes a set of printed forms and these are introduced to client firms by an HPA consultant who makes an intensive study of the cost structure of each participating company. Appropriate staff training is provided so . that the costing system operates smoothly from the outset.
Haulcost tells the haulage contractor his profit at the end of each month. It pinpoints expenditure items which are controllable, giving advance warning of cash flow problems and helping to control overheads. It is useful to hauliers who need to support loan applications by solid documentary proof and claims to provide reliable and up-to-date information for use when negotiating rate increases. User of the system should be able to make effective plans for vehicle utilization, with a concentration on routes or services showing the greatest profit. It also avoids the all-toocommon experience of unintentional overdrawing. The aim is to take the guesswork
out of haulage operations.
The four-part plan features a budget, a vehicle earnings schedule, a cash management system and monthly operating statements, each part being tailored to the specific needs of client firms.
The methodically built up budget provides operators with their own personal operating plan for the ensuing year. It is assembled progressively from detailed estimates of income and expenditure, thus providing a forecast of profits and the all-important cash flow.
The vehicle earnings schedule tells the operator how much each of his vehicles must earn, on various mileages or services, to make the required profit. This schedule is used daily to assess journey profitability. All rates charged are monitored periodically for profitability.
The cash management system shows on a daily basis the unavoidable payments — standing orders, wages, fuel, road fund tax, etc, with the anticipated receipts and forward commitments for the next four weeks, so that the cash available figure is thrown out in the final column.
The operating statements produced at month-end give a comprehensive picture of trading results during the month. Departures from budget are revealed so that it becomes relatively simple to take corrective action.
The installation of Haulcost normally involves a fact-finding visit of one to three days according to the size of the client company. The information gathered is processed to compile the budget and vehicle earnings schedule and a further visit is paid by an HPA executive at which the full documentary system is explained.