Transportation Management Systems - Why You Should Consider Using One.

Transportation Management Systems - Why You Should Consider Using One.

When I initially purchased my truck and leased on to a carrier, I opted for a simple accounting solution. I would advise anyone who owns a truck and leased to a carrier to use the software that I linked to. I get no referral, just a very happy customer for a few years now.

Fast forward to having my own authority, which I have had for almost a year now. Until now, I have continued to use the software mentioned above. It has worked fairly well, but lacked a few things I needed, such as invoicing and better customer tracking. It was great for expenses, but I was needing something more.

What changed with my authority?

  1. Invoicing
    I now have to invoice my customers (brokers, direct shippers, etc) to get paid. While it is simple enough to just create an invoice from a template, it is time consuming, and the tracking abilities doing it this way are non existent. I could use something like Quickbooks, but I would still want something built for trucking to handle the rest of my accounting, and using two different systems is not the way I want to go as I look toward the future.
  2. Tracking customers (Brokers, direct shippers, etc)
    As a carrier, at least for me, you deal with many customers. I believe in my first 50 loads as a new carrier, I used 48 different brokers. As I approach a year with my own authority, that number is significantly higher. I wanted a system that would automatically track these customers, particularly how quickly they pay. I wanted to be able to quickly click on their name and see things such as Days To Pay, accessorial fees, and any particular notes I wanted to keep on the customer. I want to remember particular agents that I prefer to use with different brokerages.
    In addition to tracking brokers, I wanted the system to track shippers/receivers as well. Something where I could add notes to build the potential for potential dedicated type lanes based on where I have picked up and delivered loads. I want to be able to identify potential direct shippers based on business I have done with these shippers via the many brokers I use.
  3. Expense Tracking
    Many small business owners (large ones as well for that matter) throw away tons of money simply because they have no idea where it is all going. You need to know where every penny goes in order to track how to reduce your expense costs. How much is that fuel additive costing you each month? Is it truly worth the expense? Good tracking answers those questions.
    Don't forget tax time, either. When the new year rolls around, you want to be able to sit back and wait on a few 1099's (in order to verify accuracy), and be able to submit your tax information to your accountant immediately. You don't want to start adding up receipts at the last minute, or even worse, sending the receipts to the accountant and paying them to sort things out for you. If you are doing this, then you aren't tracking your expenses, and clearly spending more money than you need to be.
  4. Expansion
    When the time comes that you want to add to your fleet, be it company owned equipment and hired drivers, or leasing on owner operators, you want to be able to do this as painlessly as possible. You (or at least I) want a system that allows me to pay a driver his/her settlement with the click of a button. I want a system that tracks the performance of each driver/owner operator.
  5. Driver and Equipment Files
    Whether a company driver or owner operator, you have to keep up a qualification file for the driver and equipment. As you grow, having a system that alerts you to expiration dates for things such as drivers licenses, medical cards, inspections, plates, permits, and other things can be very beneficial. Sure, you can manually check these things, but it's much easier, and far less time consuming to have a system that tracks this and alerts you.
  6. Audits (IRS or DOT)
    When you are faced with an audit from the IRS or DOT, you want to have all your ducks in a row. When an inspector starts asking you for things, and you begin searching frantically to find them, expect the audit to get more intense. Having everything quickly available and easily accessible online can save you headaches and money in the event of an audit.

I've only touched on the things that a good Transportation Management System can do for you. There are some out there that are powerful enough that they tie in with many of the popular ELD systems, and automatically track IFTA for each of your vehicles. There are some that even tie into your fuel card accounts and automatically add those expenses do your system for you as well. As with all transportation management systems, however, there is a cost involved. The more it does, the more it costs.

Can a small carrier operate without a Transportation Management System? Of course. You can manually keep up with all required documents. You can do your accounting with pencil and paper, or even set up something like Quickbooks to work for you. It all comes down to how much time you want to spend manually doing things, vs. the value you see in having a system that automates much of the work. Your abilities also come into play. Some people may be a genius when it comes to operating Quickbooks and creating spreadsheets, while others may get a headache just thinking about it. For the latter, especially if you are busy operating your own truck, I highly suggest you find a good Transportation Management System that will assist you in running your business.

While I am not currently endorsing any specific system, I am just now getting started testing Trucking Office. In a matter of minutes, I got my business info entered into the system, and entered in my two current loads. There are others out there, even free options. I chose to try something I felt was fairly priced and powerful enough to effectively manage my business from my current size of one truck/trailer to as large as I can envision my company growing. There are companies as large as 300 trucks using Trucking Office, so as long as I like it, there should be no problems growing with this software.
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