Auditing Your Business and Preparing A Budget For 2024
While peak freight season is in full swing, it is never too early to look ahead by auditing your business and start planning for 2024. This means taking a hard look at what has worked, where you have spent money, and where you can improve.
Admittedly auditing your business is never fun, but it is an essential part of running your business, and can reveal areas of improvement in the coming months and years. The key component is to cut out the fluff, look at the hard numbers, and have an honest evaluation of your business before the calendar resets.
Auditing Your Business
At its core, an audit is a systematic, documented, and objective review of your business. In layman’s terms – you are pulling back the curtain to look at where money is coming in and where you are spending your money.
The first step is to collect all of your invoices, credit card statements, and business records for the year. The more information that you are able to collect, the more comprehensive your audit, and the more insights you will be able to gain heading into 2024.
3 Essential Budget Items To Examine Before 2024
Once you have all of your documents in front of you, it is time to start looking at big budget items. Each of the following areas can be looked at in a couple of different ways. Many will break things down into a cents per mile equation, but it can also be helpful to look at overall costs month after month.
Truck Note / Lease Payment
You have to have a truck to keep your business running – that part is pretty plain and simple. But how much of your revenue each month, or throughout the year, has gone to your truck payment?
When building your budget, factor in a rainy day fund to help offset fluctuations in the freight market, or when life happens and you need to take time off the road. This can prevent you from getting behind. Even setting aside 1¢ per mile can provide a cushion when times get tough.
Unlike your truck note, maintenance costs can vary wildly making it hard to budget appropriately. Newer equipment should be covered under a manufacturer’s warranty, but even then there preventative maintenance and tires can quickly add up.
Telling yourself you need $15,000 to cover maintenance costs in 2024 can be overwhelming. Instead, break it down to a per mile basis with the following equation:
(Total Maintenance Costs / 12) ➗(Average Miles Run Per Month)
That number is a good starting point, but it helps to understand that labor costs are generally where maintenance costs start to skyrocket. To help budget, look for programs like those provided by ES Advantage, that offer a set rate at nationwide repair facilities. Rather than paying a premium for an unexpected repair, you know that you are getting a consistent rate that won’t blow your monthly budget.
A single truck can consume upwards of 20,000 gallons of fuel each year. With the national average price of diesel hovering around $4.50/gallon, that would equate to $90,000 a year. Now we all know that fuel prices fluctuate and depending on where you run, it can be significantly higher or lower than that amount.
As you prepare your budget for 2024, finding ways to lower fuel costs should be mission critical. It is one of the biggest budget items, and it is one that you have a certain amount of control over. That isn’t to say that you can dictate fuel prices, but you can choose when and where you fuel up along your route.
Take advantage of the discount programs available to you. At ES Advantage, we have created a program that provides an extensive network of fuel providers, and discounts that are unparalleled.
Let ES Advantage Help You Prepare For 2024
2024 will be here before you know it, and things get a big hectic this time of the year. If you are a member of the ES Advantage community, our team is ready to jump in and help you plan for next year. Whether it is budgeting, filing your IFTA taxes, or expanding your business, we are here to help you LIFT up your business.
Connect with our team to learn about all of the advantages that ES Advantage has to offer.