A trucking company Balance Sheet might feel like a puzzle at first. But it’s a powerful tool for understanding your financial health. Think of the Balance Sheet as a snapshot of where your trucking company stands.

In this article, we’ll cover how to build a Balance Sheet for your trucking company using simple building blocks.

 

Balance Sheet Equation

At the heart of every Balance Sheet is a simple law of accounting equation:

 

 

You can also look at it as Assets – Liability = Equity

These three blocks and the equation help you spot financial trends, manage cash flow, and keep your debts under control. Knowing where you stand financially helps you grow as a trucking company and avoid surprises. The industry comes along with enough surprises!

• Assets: What you own and what you are owed
• Liabilities: What you owe
• Equity: Value left over for you

 

 

Trucking Company General Ledger Accounts

Each block of the Balance Sheet is made up of one or more general ledger accounts. Each account or “bucket” holds individual transactions.

The category of an account determines which block it will fall in on the Balance Sheet. While there are many different categories of general ledger accounts, only a few of them will appear on the Balance Sheet.

Frontline Q7 comes with a set of accounts that make sense for a trucking company. They are set up for recording transactions out of the box, which takes the guess work out of the process for you.

 

Building Block 1: Assets

This block contains everything your trucking business owns. The assets block can be divided into two general ledger account categories.

• Current assets: Assets you expect to turn into cash within a year. Common current assets for a trucking company include:
  • Accounts receivable – Unpaid invoices from shippers, brokers, or other billable parties.
  • Driver cash advances – Track the outstanding balance of fuel card cash advances.
  • Inventory – If you own a shop, record your on-hand inventory value.
  • Bank accounts – Your checking and savings accounts belong here.

• Fixed assets: Long-term assets that represent a big investment. Common fixed assets for a trucking company include:
  • Trucks – Value of trucks belong here, even if you’re paying off a loan.
  • Trailers that you own.
  • Accumulated depreciation – Since fixed assets lose value over time, you’ll see a negative account in this section showing depreciation. That way, your fixed assets section represents a true value. This is a requirement of the IRS.

Building Block 2: Liabilities

This block contains everything your business owes. The liabilities block can be divided into two or three account categories:

• Current liabilities: Liabilities you should pay off within the year. Common examples for a trucking company:
  • Accounts payable – Unpaid invoices to utility companies, fuel companies, etc. This can also include unpaid pay settlements for owner operators or carriers.
  • Driver escrow – Withhold funds for accidents, payments on licenses, etc. Use the funds when needed.
  • Payroll taxes – Use these funds when payment to the tax entity is made.
• Long term liabilities: Debts that extend beyond a year. These types of liabilities can help you grow, but take care to manage them carefully. Common examples for a trucking company:
  • Truck & trailer loans
  • Cash loans from the bank

Building Block 3: Equity

The final block contains what’s left over for you. A well-managed Balance Sheet helps you increase equity over time. This section can be difficult to understand, so Frontline Q7 computes retained earnings automatically so you don’t have to.

• Calculated retained earnings – The history of net profit  You can find this figure on the Income Statement.
• Year to date retained earnings – Net profit or loss within the same date range as the Balance Sheet. This is also found on the Income Statement.
• Owner’s draw – A negative amount that represents the owner withdrawing funds for personal use.
• Shareholder distributions – A negative amount representing a portion of the profits being distributed to shareholders.

Is The Balance Sheet In Proof?

It’s important for the Balance Sheet to be in proof – meaning that the assets = liabilities + equity. If you look at the complete Balance Sheet, you will see that this is true. But why does it matter?

• Accuracy in financial reporting: If it doesn’t balance, you have an error such as missing entries, incorrect account postings, or calculation mistakes.
• Clear picture of financial health: You can use this snapshot to make informed business decisions, secure financing, and manage cash flow.
• Credibility: Discrepancies on your Balance Sheet can raise a red flag to auditors, lenders, or investors.
• Legal and tax compliance: A Balance Sheet that is out of proof can lead to penalties or scrutiny by regulatory or tax agencies.

With the robust reporting tools in Frontline Q7, your Balance Sheet is always in proof. The trucking software tracks every transaction in real-time, so you can trust your report is accurate when you really need it. Furthermore,  additional reporting tools flag transaction data entry errors in real-time, so they can be fixed before they become a problem.

 

 

Other Trucking Company Balance Sheet Tips

• Accounts Receivable & Accounts Payable ratio: In the trucking industry, a good AR to AP ratio typically ranges from 1.5:1 to 2:1. This means that for every dollar owed to suppliers (AP), your company should ideally have $1.50 to $2.00 in receivables (AR) from customers.
• Debt to equity ratio: In the trucking industry, a healthy debt-to-equity ratio typically falls between 1:1 and 2:1. This ratio shows how balanced your company is between borrowing and owner investments, and helps you understand if you’re borrowing within safe limits.
• Return on assets (ROA): This measures how effectively you’re using your assets to generate profit, and therefore give you insight into whether your trucks and equipment are working hard for you. In the trucking industry, a healthy ROA typically falls between 5% and 10%.

 

The Bottom Line

Understanding your Balance Sheet might seem challenging at first, but it’s incredibly rewarding. By knowing what you own, what you owe, and how much is left for you, you’re set up to make smarter and more strategic business decisions. And with Frontline Q7 compiling your Balance Sheet effortlessly, you have one less thing to worry about.

Ready to simplify your trucking company’s financial management? Let Frontline Q7 take the wheel. Reach out for a demo and see how easy it is to manage your Balance Sheet and more with the right tools.