American Trucking Associations’ seasonally adjusted Truck Tonnage Index decreased 1.4 percent to 159.6 in May, only the second drop in the last nine months. Even with the reduction, May’s index was the second highest on record. April’s record high was revised upward to 162.0, while March’s reading was revised upward to 157.5. “Despite the monthly reduction in truck tonnage during May, I believe the economic expansion is still very solid, and so is the trucking industry,” says ATA Chief Economist Bob Costello. He added that he believes freight volumes are constrained not by the availability of freight but by the availability of qualified drivers.
The Freight Transportation Services Index was 126.0 in April, 6.3 percent higher than in April 2003, the U.S. Department of Transportation’s Bureau of Transportation Statistics reported. The freight index has risen for three consecutive months.
More than 16,500 member fleets of TruckersB2B, a subsidiary of Celadon Group, will be eligible for rebates on fuel purchases at participating TravelCenters of America locations, Celadon said. TruckersB2B members will receive a rebate of up to 3 cents per gallon at TA when they use Comdata, EFS or Fleet One cards.
International is now offering a Fair-Market Value lease, which allows customers, particularily small fleet and business owners, to own an International 4000 Series truck for as little as zero down payment. The truck maker also is offering a $599 per month lease payment for select International 4200 models.
The average accountant is not the “great communicator” when it comes to monthly financial reporting. Certified public accountants often see only numbers. The typical business owner focuses on marketing or operations. So monthly financial reports prepared for owners and meetings between owners and CPAs often leave much to be desired. Columns of hard-to-read P&Ls, balance sheets and cash flow reports leave most non-CPAs with a migraine.
That’s beginning to change, thanks to ongoing training and new software tools. A good example is a project by a network of CPA firms called RAN ONE that tries to turn ordinary accountants into business coaches – and thus better communicators.
Don’t expect your controller or CPA to suddenly become the life of the party. As a CPA myself, I’ve grown to expect that glazed-over look from others at a social event when someone introduces me as “my accountant.” We generally don’t have the reputation of being people you want to invite to your next gathering.
But what the RAN ONE project will do is provide a powerful blueprint for how monthly reporting and oversight of operations should and will look in the future. Here’s an outline of a typical report by Navigator, the latest RAN ONE tool for monitoring and managing the performance of a business:
Urgent issues. The top current business issues should be listed and discussed in this brief section. For example, if your line of credit, your tags or your insurance are up for renewal in the next 30 days, a brief paragraph should outline the issue, the facts and any response already under way.
Results. Key performance indicators – summary for the current month and year to date; and forecast for year for budget, actual and variances – should be reported in tabular format. For trucking companies, these might include total revenue, number of operating units, average revenue per operating unit vs. target, percentage loaded, fuel prices, profit margins and any number of other key financial or operational numbers. Below these would be a commentary on the most important items.
In effect, these numbers are your company’s “dashboard,” so why not literally treat them that way? The Navigator system offers a series of digital dashboard gauges – complete with redline, yellow zone and a green zone reflecting the safe operating range, and a needle reflecting the company’s actual position – that illustrate performance for non-accountants. Key trends for the last several months should be presented, along with commentary.
Good examples for carriers to track on digital dashboards include cash flows – monthly and cumulative YTD, load volumes, safety stats, on-time percentages or cargo claims. Keeping an eye on these trends helps everyone stay alert and drives home the importance of quick action before any damage is done.
Strategic initiatives progress reports help remind everyone of the action plan that was set for the year, with a monthly report on the progress – or lack of it – on each important task. Examples of strategic initiatives include cash flow studies, driver recruitment efforts to grow target segments, locating capital sources and analysis of lanes and routes.
Position summary – external and internal. Business is like a chess game. Competitors don’t just sit there waiting to bear the brunt of all your efforts. They are making just as many moves as you. No business that looks solely within itself can compete for long. In this section, reports should be made on the external environment, including:
*What customers and competitors are doing;
*What’s happening in the industry, in technology and the economy, both regional and national;
*What’s happening with shareholders.
From the internal side, summaries should reflect efforts in products and services, marketing and sales, people and staffing, systems and processes, and financial matters.
Appendices/financial statement summaries. Finally, look at the financial statements. Normally first, these should be appendices but still summarized with commentary.
Why are these last? A friend and mentor once said, “Most accountants and their reports tell me I was doing 60 miles an hour eight months ago.” In other words, financial reports are historical and don’t necessarily relate to where you are on your plan today. You should spend much more time looking at where you are going and how fast you are getting there than what the landscape looks like in the rearview mirror.
The format suggested above is the closest thing yet to satisfying my perceptive friend. One strategic initiative you might begin immediately is how to make your monthly financial reporting more effective.