 |  |
How To: Cost Trucks Like Contractors
1. Background1. Background
The Logger's Edge allows you set up your truck costing so that you can base trucking costs for your own trucks using two basic methods:
1.) Costing by Load Ticket. This method uses the load tickets entered in the The Logger's Edge to calculate your internal costs. There are several alternative ways of using your load tickets to cost your trucks, including by the net weight hauled, by the distance, or by the net weight multiplied by the trip time (tonne-hour)
2.) Costing by Time Slip. This method uses the time slips you enter in The Logger's Edge to calculate your internal costs. If you enter time tickets for your trucks and/or truck drivers these slips will be used to calculate the hours the truck was in operation. Combined with an hourly standard cost, The Logger's Edge will compute the internal cost of operating the truck.
There is a third alternative that is available in Logger's Edge versions 4.5.6 and above.3) Costing Like Contractors. This method allows you to skip the standard methods (#1 & #2 above) in The Logger's Edge and to assign costs to your trucks like they were owned by a subcontractor. This method allows you to set up pay rates (like contractor pay rates that apply to your own trucks) and then calculate truck costs at rates that mimic those that you pay to your subcontractors. This approach allows you to answer two basic questions:
1. What would my truck costs look like if my trucks were charged out at the same rates as my subcontractors? And
2. What would my trucks 'earn' in revenue if they were paid like subcontractors?
2. Steps
Enable Contractor Truck Costing in Basic Setup
You must be logged in as an administrator in order to enable the truck costing settings.
On the trucking Tab, you must set the 'Truck Costing (Own Trucks)' option to 'Mirror Contractor Pay'
This option only
works for Load-based pay. If you are costing your trucks by the hour
(through time slips), the 'Mirror Contractor Pay' option will not work.
3. Working with Contractor Pay
You set up trucking rates for your own trucks like you would for sub contractors. In the pay contract set up wizard you can either use the 'OWNER' wild card to pay your own trucks or you can use the your own company.
For example, in the screen above, 'Mountain View Logging' is the name of my company. Thus, I could set up a rate that applied to my own trucks which are identified as being owned by 'Mountain View Logging'
Now, when you run the vendor calculator, The Logger's Edge will treat your company's trucks like a contractor's trucks. Just like for contractors, if no applicable rate is set up you will get an error. The Logger's Edge will create a vendor statement for your company's trucks.
The statement
will cover all 'is pay like trucking' activities.
The truck pay calculated under this option replaces what would otherwise be calculated in The Logger's Edge for company-owned trucks.
If
you pay your own drivers, you may need to set up a deduction activity
against the regular trucking rate. For example, suppose you set up a
trucking rate of $20/Tonne for both your contractor trucks and your own
trucks. Also, assume you set up a rate to pay your own drivers at a
rate of $5/Tonne. In this case, the cost of the trucking phase would be
$20/Tonne for subcontractors yet $25/Tonne for your own trucks. In order
to avoid this circumstance, you can set up a trucking deduction of -$5/Tonne
for your own trucks, but not for contractor trucks. The screen below
shows an example of this type of setup.
Notes:
- You must ensure that the trucking deduction only applies to company-owned trucks.
- The deduction rate should mirror the driver pay rate, only with the opposite sign
- The deduction activity must be setup as a 'is pay like trucking' activity.
- Make sure that you have indicated to pay the deduction activity on the block setup
4. Reports
In the The Logger's Edge reports, the truck costs for your own trucks will flow though just like for contractor trucks.
There are two reports that are of special interest with this setup.
(1) The Block P&L Report (Report #101). In this report, the standard truck cost for your own trucks will now appear in the section for load-based pay for subcontractors:
If you have set up a trucking deduction phase for your drivers, if will appear in this section as well.
(2) Truck Costs as a Percent of Revenue (Report #623). In this report, you can see a breakdown of your operating costs, both in dollar terms and represented as a percent of revenue. The report covers all truck operating expenses, including pay for your drivers and for mechanic time spent to service the truck. The report uses the calculated vendor pay amount (to your company) as the revenue figure when the 'Mirror Contractor Pay' for trucking is invoked.
if the 'Mirror
Contractor Pay' for trucking is not invoked,
The
Logger's Edge will use the pro
forma revenue calculated for invoices as the trucking revenue. For
loads, the report uses the calculated invoice revenue, not the revenue
entered in the loadslip revenue table.
