Notes on the Per Diem and Reimbursement Systems:
Once again, there is considerable overlap in the industry between the two systems described above. For example, in practice, the per diem system often works like this: The trucking company allows you a per diem of $XX.OO per day. When you head out, you pay expenses out of pocket using your own cash and credit cards. When you return from a trip, you get reimbursed for the amount of per diem times the number of days out. For example, if the per diem is $25.00 per day and you are on the road for 4 days, you get reimbursed for $100.00. Chances are, the company will keep track of the per diem and days out for a month at a time and you will receive a monthly expense reimbursement check once each month.
On the other hand, some companies will wire you money at stops along the way. This reimbursement system usually works well if it is set up that way from the beginning because all the needed accounting procedures are in place at the company's bookkeeping office. But the system isn't always as great as it sounds. It has been known to break down. If the system is haphazard, it may be hard to collect your money later, especially if you lose a receipt or two.
PURPOSE: In this exercise you will learn how to use the Monthly Truck Expense Report. First, we will explain the purpose and importance of the form. Then, you will be doing a very short exercise in which you will properly complete the form for a couple of days on the road.
CONTENT: All businesses need to keep careful records of business expenses, and trucking is no different. The road expenses we talked about in the exercise above are one type of business expense. When we talk about road expenses, how- ever, we are limiting our concerns to the long haul driver. In this exercise, we are going to be talking about the Monthly Truck Expense Report. This report is the concern of all drivers, short run drivers, long haul drivers, owner-operators, company drivers, intrastate and interstate drivers - all drivers. Snap out one copy of the Monthly Truck Expense Report from Part IV of this workbook now.
Purpose and Importance of the Form
While not all drivers complete a form like this one themselves, many do. All owner-operators must keep track of truck expenses somehow, especially those are responsible for paying all truck expenses themselves. And they certainly have to keep a record like this if they want to have clear records for their personal income tax report (as well as their profit and loss or business income statement). But many carriers expect their drivers to keep careful records of truck expenses too. The company uses them to draw up overall cost records which they use in their own accounting process.
Once the report has been properly filled out, it needs to be submitted to the proper person. For owner-operators this will probably be either the owner-operator's personal bookkeeper (if the driver is responsible for truck expenses) or the leasee's accounting office (if the trucking company is responsible for truck expenses). Company drivers will probably just hand the form in to their supervisors at the end of each month and the supervisors will hand it in to the accounting office.
DO: We're not going to have you fill out the Monthly Truck Expense Report for an entire month. You will be filling one out for two weeks in Part III of this workbook. For now, however, why not get a little practice in filling it out for a few days?
Look back at Instructional Exercise #1 above. Take the same trip on February 10, 11, and 12, and record the truck-related expenses on the Monthly Truck Expense Report which you already snapped out.
Then make the trip back to New Jersey, taking three days to get there. Add the following expenses to your Monthly Truck Expense Report.
Day 4: During your pre-trip inspection, you notice that you are down a gallon in oil. Purchase two gallons at $8.00 each (one for now, plus a spare) at the first truckstop you come to. Also buy a quart of gear box lubricant at $3.95 a quart, 2 rolls of electrical tape at $.39 a roll, four different bulbs at $.89 each, and 2 lenses for your stoplights at $.90 each. (The prices at this truckstop are good and you noticed when you went to get a gallon of oil that many of your supplies were getting low.)
Day 5: Drive 2 hours on the interstate until roads become impassible due to snow the night before. Attend vehicle 3 hours while waiting for the snow plows to come through. Back on the road for 30 minutes; then stop for lunch and fuel. Purchase 154 gallons of diesel fuel at a total cost of $181.57. Drive without incident for the rest of the day.
Day 6: Return to home terminal without incident.
After filling in the Monthly Truck Expense Report, why not answer the following questions for review.
- Why did you attend the loading of your trailer on Day 4?
- Considering the cargo you carried, do you think you should have been driving on Day 5? Did you take reasonable precautions during the haul?
