HINTS FOR HAULIERS.
Page 19
If you've noticed an error in this article please click here to report it so we can fix it.
Summarizing the Information Which Has Been Embodied in the Series of Articles Just Concluded, in which a Method of Discovering and Recording Costs Has Been Outlined.
TlIE principal difficulty with which 90 per cent. of hauliers have to contend is their ignorance of accountancy. They do not know bow to keep books, and in consequence overlook many important items of expenditure. The publication of average tables of costs helps., but is mit a. complete.guide. Each haulier should know his own costs, The Object of this i .series s to show him an easy method of acquiring the knowledge as quickly as possible: •
* March nth, 1923.
Fuel and lubricants are bought, generally, from day to day as required. So also are sundry items, such as 'sparking plugs, bolts and ,nuts, paraffin; lanip Wick,and. thing of that
character. Keep track 'of these by insisting on a for everything, and keep the bills together on spike filesif-orie for . fuel, one for lubricants, and one for sundries. • .
April 3rd, 1923.
Wages, the next. most important item on the hauliers' expense sheet, is on a different footing from 'fuel, oil, and stindries. It is a "standing charge," since it dues not vary, but stands at the same level eaeljt week. The others are " running coats," because they increase or decrease as the weekly mileage goes up or down, Running costs and standing charges must be considered separately arid kept. apart. Consideration of wages is, therefore, postponed to deal with other running costs, such as that of tyres.
April .10th, 1923.
Next to fuel, the tyres involve the biggest outlay. They must be considered carefully, but, as the haulier will, not: know what, they are coating him until they are Worn out, an eStimate is useful.Assume a life of 12,000 miles for solids,
5,000 miles for covers and 10,000 miles for tubes. .• April 24th, 1923.
Some interesting figures of the running and operating costs of the vehicles owned by H. Viney and Co., Ltd., as well as a scheme for the Enumeration of the various items of establishment charges, are given to form a basis for future discussion.
May 1st, 1923.
There. are two reasons why depreciation is important. It is a measure of the life of the vehicle, which will not live for ever, and which, when it dies, will cost a lot to replace. The haulier must., therefore, remember that, when he is run•• ning the miles off for some client, he is wearing out. his lorry, for which that. client must pay. This amounts to one-150,039th part of the first Cost -of a new vehicle; less' tyres, per mile, . The income-tax authorities allow, an annual _depreciation of 20 per cent. when assessing the haulier's. income.
• May Stir, 1923.
• An important item in' the maintenance cost of a lorry is the annual overhaul. The'expenditure on this depends largely on the care with which the chassis is used ; also on the skill of the Mier in 'performing the Work hiinself. From one :eighth . of a penny to 2d. a mile are possible figures in this respect.
. A great help to bookkeeping .of a simple order is the bank pass-book. On the credit side as a, memo for amounts which have to be set aside per mile, deducting such accumulated funds from the gross bank,balanee,each, month, thus obtain: ing a net figure showing the amount of free cash at the hank.
May 15th,1923. • With the information collected by the means outlined in . previous articles, the haulier is now able to make a start in keeping his proper records. A small notebook for noting the daily mileage is required, and should he entered up asshown in.table m appearing in the issue of The Commercial Motor. for May 22nd. The expenditure per month, and the cost. per mile, must be entered in the form shown in table I in the same issue.
May 22nd, 1923.
Standing charges, being more or less regular, both ai to payments and amount, are more easily recorded, In the farm shown in table IV appearing in the issue of The Commercial Motor for May 29th. they May be registered readily.
May 291h, 1923.
The relative. impoitance of standing charges and running costs is .only appreciated when the haulier encounters s job in Which a lot of time islost :loading and unloading.In such
• a, esi.se, if the ,haulier has 'quoted by, the mile, he will lose on the job because the, standing charges for it. are so high. June 121h,. 1923.
The ordinary lorry owner is only interested in the' running costs and standing charges of his lorry. The haulier has other expenditure to whicls. he must pay regard before he quotes for •work, He has to 'get back all he spends on his businesstelephone, postage, office maintenance, and so onarida profit as well. Many hauliers overlook this exPencliture.
June 19th, 1923.
The extent of establishmentcharges will vary considerably. For an owner-driver, having only .one lorry and using his home as headquarters or office, the total should not be more than £1 13s. a week, ,although the actual amount may be affected very considerably by traVelling expenses..
July 3ra, 1923.
Overhead cost's, or establishment charges., naturally increase rapidly as the haulier's fleet is -enlarged. For exaniple, man with:three -lorries, one Of which•he drives, Would Very likely find his expenditure in the maintenance of his binsiness (apart from the operation of his lorry) to be £6 6s. 3d.—to take a specific ca:se. This sum seems very large by comparison with the establishment. expense of a man with one lorry, but. it has to be divided 1*,,, three, giving £2 2s. Id. per lorry.
J-uly 10t3, 1923. ' * If a man, having a. fleet of, say, three lorries, decides that he will drive none of them, but will devote himself entirely to the management of the business, he necessarily increases the establishment charges by the a-mount of his own salary as manager. In such a. case, the total overhead costs will approximate to 210. Actually £10 1s. 3d. is given in a specific case. Equivalent to £3. 7s. 1d. per lorry per week.
The establishment charge is really an addition to the standing charge, and is more and more felt as theweekly mileage decreases. 'Thus, while £3 7s.1d. a week is only twopence a 'mile at 400 mites a week, it is eightpence at 100 a week.
• • • ju1y17th, 1923.
When .estimating hire chaiges per mile it is flecesasy to add together the standing -charge per Week, the establishritent echarge .for d like Period, and the weekly profit. • The total is then divided by the weekly mileage, anti the running cost pet Mile added to the figure thusobtained.. It is Clear, therefore, that the one man one Ion'. business has the advantage; if the weekly mileage be the same.
.; • •• July 2.(111, 1928.
Since, however, the non-driving owner, has .better :opportunities for obtaining buSineSs than the man who spends most of his' time driving, he is able to increase his business to such an extent that his extra mileage per week more than balances his heavier overhead ,cost, If, for example; hecan obtain work involving 240 .miles per week for a Jorry, against the single-lorry man's 200 Milis,• be has the advantage.
July 31st, 1923.
AnotIer thing which must not be. oyerlooked in considering these relative establishment expenses is the-total profit-taking capacity: The one-man.one-lorry business has the advantage in being able to quote lower rates, for: the same total of weekly mileage, but, if the three:lorry man gets alittle extra mileage his profits are raNre than correspondingly increased • On the other hand, it is certainly not the ease that a three-. lorry man earns three times as much as he who only owns one. Anyutd 7th, 1923.
THE SCOTCH.