For small to medium trucking companies, making an investment in trucking software can seem like a big leap. You might ask yourself, “Will this truly benefit my business?”

Use Return on Investment (ROI) metrics to determine whether an investment is worthwhile. It’s about finding out whether the software helps you save time, reduce errors, and improve your bottom line.

 

 

Steps to Calculate Trucking Software ROI

Start by collecting the data that you will need in order to make a calculation.

1. Identify Costs

As the first step, wrap your arms around the costs involved with buying new trucking software.

• Purchase price of the software
• Implementation and setup costs
• Training costs
• Ongoing subscription or licensing fees per year
• Maintenance costs for networking per year

2. Quantify Benefits

As your second step, find or estimate the monetary benefits involved with buying new trucking software.

• Calculate the hours saved per week by automating data entry, dispatching, and other tasks.
  • Multiply the annually saved hours by the average hourly wage of your employees to get the monetary value of time saved.
• Determine how better reporting impacts your decisions. For example, if better reports lead to cost savings or revenue increases, you can estimate the financial impact.
• Consider the time saved by letting trucking software generate financial and profitability reports faster and more accurately.
• Time is also saved with robust reports that alert you about mistakes in data entry.
• Estimate the cost savings that come from less errors or needing to correct data entry mistakes.
  • Importing mileage and fuel data will create a precise IFTA report out of the box, which will lead to more informed decisions and less chance of an audit.
  • Improved route planning means less dispatch mistakes.
  • Flags and other reporting tools mean less mistakes in billing and driver pay.
  • Automated messages that trucks or drivers are ineligible for dispatch means less auditing, accidents, and claims.
  • Single sourced data entry means things don’t need to be entered twice.
  • No more keeping data in multiple Excel spreadsheets or entering transactions again in QuickBooks.
• Calculate the fuel and maintenance savings from more efficient dispatch and routing.
• Use robust reporting tools to analyze data which helps you make more informed decisions.

3. Calculate ROI

Use this formula to calculate the estimated return on investment.

 

 

 

Where Net Gain from Investment = Total Benefits – Total Costs.

Let’s do an example. Let’s say you have a small to medium sized trucking company with the following details:

• Initial costs: $7,000 (first period of subscription, set up fees, networking set up, etc.)
• Ongoing costs: $3,500 per year (subscription, maintenance, networking, etc. annually)
• Time savings: 9 hours per week (52 weeks in the year) saved, with an average hourly wage of $20 = $9,360
• Improved reporting & decision making: Estimated $10,000 annual benefit from better business decisions
• Error reduction: $4,500 annual savings from fewer billing and routing errors
• Fuel and maintenance savings: $3,000 annual savings from optimized routing

Total Annual Benefits = $26,860

Example Trucking Software ROI Calculation

• Total Costs: $7,000 (initial) + $3,500 (ongoing) = $10,500
• Net Gain from Investment: $26,860 (total annual benefits) – $10,500 (total costs)  = $16,360
• Return on Investment: ($16,360 / $10,500) x 100 = 155%

In this example, the ROI of the trucking software is 155%, which indicates a significant return on investment.

 

 

Overcoming Common Challenges in Measuring ROI

Many small to medium trucking companies struggle with understanding how to measure ROI on their software. Here are a few tips:

• Set clear objectives – Before buying new trucking software, set clear and measurable objectives. Know what you want to achieve. Do you want to reduce fuel costs? Avoid data entry mistakes by automating routines? Enhance financial reporting?
• Use benchmarking – Compare your performance metrics before and after implementing the trucking software.
• Regular reviews – Adjust your strategies as needed to optimize the software’s impact.

Frontline Q7’s support and development staff always have an open ear. If there is something that would make your job easier, we keep an open door for requests and often implement them in the software.

 

Is It Worth It?

Investing in trucking software is a huge decision. With the right approach, it can lead to substantial benefits. By measuring the ROI, you can make sure that Frontline Q7 meets your trucking company’s needs. Your success is backed by Frontline’s dedication to serve trucking and brokerage operations.

If you’re ready to see how Frontline Q7 can drive your business forward, contact us for a free demo. Let’s work together to achieve growth!