Reconciling Fuel Cards and Factoring Payments for Trucking Companies

What trucking books need to track

A trucking company has more moving parts than most businesses. Each truck is its own little cost center. It burns fuel. It needs repairs. It pays tolls. It runs maintenance. And every load it carries has a price you charged and a set of costs it took to move it.

Your books need to track all of that by truck and by load. When you do, you can see which trucks earn their keep and which loads pay the best. When you do not, you get one big pile of fuel and one big pile of repairs, and no way to tell where the money went.

The two lines that cause the most trouble are fuel cards and factoring payments. Fuel cards move fast and land in a lump. Factoring payments come in two pieces, the advance and the fee, and they get booked wrong a lot of the time. We handle both the same way every month so your numbers stay clean.

How fuel cards work in your books

A fuel card is a card your drivers use at the pump. The card company sends you one big bill every week or every month. That bill covers every fuel stop every truck made. The charge lands in your bank as one lump, or it lands on a card balance you pay off.

The problem is that one lump is five trucks worth of fuel. If you book it as one fuel cost, you lose the picture of which truck used what. You also cannot tell if one truck is burning more than it should. A truck that burns too much might need a repair. A truck that burns less is saving you money. You can not see either one when the fuel sits in one bucket.

Here is what a clean fuel card entry looks like.

When you split the fuel by truck, you can see what each truck cost to run. That number feeds right into your profit per load.

How to reconcile fuel cards by truck

The fuel card statement lists every stop. Each stop shows the date, the driver, the truck, the gallons and the price. That detail is what lets you tie the fuel to the truck.

The simplest way is to tag each charge to the truck when it comes through the bank feed. Most fuel card statements include the truck number or the driver name. You match the charge to the truck, the same way you match any other bank line. When the month is done, each truck has its own fuel total.

Here is a simple way to keep it straight.

• **Pull the fuel card statement each week: ** match every stop to a truck before the pile grows.
• - **Tag each charge to the truck number: ** most statements show it on the line.
• - **Keep the card fees in their own line: ** fees are not fuel, so they do not belong in the fuel cost.
• - **Reconcile the card balance to the bank: ** what you paid should match what cleared.
• - **Add up the fuel per truck at month end: ** that total feeds your profit per load.

You do not need it to be perfect. You need it to be the same way every month. When the fuel lands on the right truck each time, your profit per load is real, not a guess.

How factoring works

Factoring is when you sell your invoices to a factoring company. The factoring company pays you most of the invoice right away. You get the rest later, minus a fee. Trucking companies use factoring a lot because customers pay on net terms, but trucks need fuel and driver pay now.

The factoring company sends you cash for the invoices you sold. That cash is not your income. It is an advance on money your customer still owes you. The fee they keep is a cost of getting paid early. When you book the advance as income, your sales look too high. When you book the fee wrong, your costs look wrong too.

Here is how the pieces fit.

How to record a factoring payment

When the factoring company sends the advance, your cash goes up. But your income does not change, because you already recorded the sale when you billed the customer. The advance is a reduction of what the factoring company owes you back, or it sits in a clearing account until the customer pays.

The fee is a cost. It goes in its own account, often called factoring fees. It does not belong in your fuel or your repairs. It is the cost of getting your cash early, and it has its own place.

Here is what should be true after a factoring payment.

• **Your cash goes up by the advance: ** the money landed in the bank.
• - **Your income does not change: ** the sale was already recorded when you billed.
• - **The factoring fee goes in its own cost line: ** it is the cost of early cash.
• - **The reserve sits in a holding account until it is released: ** it is not income.
• - **The invoice clears when your customer pays the factoring company: ** the sale is done.

When each piece goes where it belongs, your sales line shows only what you really billed. Your cost lines show the fee for what it is. And your bank reconciles, because the advance matches the cash that came in.

A common mistake is to book the whole advance as a sale. That makes the month look big and the next month look slow for no reason. The fix is simple. The advance is not income. It is cash you got early for a sale you already booked.

How the two come together at month end

At month end, fuel and factoring both need to be reconciled. The fuel card statement needs to match the bank. The factoring advances need to match the invoices you sold. When both line up, your books close clean.

We start with the bank. We match every fuel card payment to the statement. We tie the fuel to the trucks. Then we look at the factoring. We match each advance to the invoices it covers. We record the fee in its own line. We track the reserve until it comes back.

Here is a simple month end check.

• **Match the fuel card balance to the bank: ** every payment cleared.
• - **Confirm the fuel is split by truck: ** no lump sum left in one line.
• - **Match each factoring advance to its invoices: ** the cash ties to the loads.
• - **Record the factoring fee in its own account: ** not in fuel or repairs.
• - **Track the reserve until the customer pays: ** then it releases to cash.

When all five are done, your profit and loss report tells the true story. Your balance sheet shows what the factoring company still owes you. And your cash matches the bank to the penny.

A situation we clean up

The fuel cards with no truck tags and the factoring booked as sales

A trucking owner runs five trucks. Every week the fuel card bill lands as one big charge. Every factoring advance lands as a deposit. The owner books the fuel as one lump and the advance as a sale. At the end of the month the books show a big sales number and one giant fuel cost. There is no way to tell which truck cost the most or which load paid the best.

Here is how we handle it. We pull the fuel card statements for the month. We tie each stop to a truck and split the fuel five ways. We look at the factoring advances and match each one to the invoices it covers. We move the advance out of sales and into the right clearing account. We put the factoring fee in its own cost line. When we are done, the owner can see the fuel cost per truck and the true sales for the month. The profit per load is real for the first time. We set up a simple rule so the next fuel bill and the next advance go to the right place from the start.

How we do it

We do monthly bookkeeping and payroll. We work in QuickBooks Online and Xero, and we are QuickBooks Online Accountants, called QBOA. Each client gets one dedicated bookkeeper who learns your business.

We categorize and reconcile in the first week. We send you one list of questions on day 8. We close your books by day 10 and send a profit and loss statement, a balance sheet, and a cash summary. We use read only access, and we never ask for your bank password.

We serve small businesses in Rancho Cucamonga, Ontario, Fontana, San Bernardino, and across the Inland Empire and the country. There is no long contract. It is month to month, with 30 days notice to stop. You can read more about how we work on our bookkeeping service page.

Mistakes we fix

• Fuel cards booked as one lump with no truck tag
• Factoring advances booked as sales so income is too high
• Factoring fees mixed into fuel or repair costs
• Reserves held by the factor counted as income
• Fuel card fees left inside the fuel total
• No reconciliation between the card statement and the bank

What we do

We do two things: monthly bookkeeping and payroll. For bookkeeping, we categorize and reconcile in the first week, send one list of questions on day 8, and close the books by day 10. You get a profit and loss report, a balance sheet, and a cash summary. We start with a free 20 minute call and reply with a fixed quote in one business day.

Common questions

How do I track fuel by truck? Tag each fuel card charge to the truck number when it comes through the bank. Most statements show the truck or the driver on the line. When the fuel lands on the right truck each time, your profit per load is real.

Is a factoring advance the same as income? No. The advance is cash you got early for a sale you already booked. It goes in a clearing account, not in sales. The fee goes in its own cost line. Your income does not change when the advance arrives.

What is the factoring reserve? The reserve is the part the factoring company holds back until your customer pays. It is not income. It sits in a holding account, then it releases to cash when the customer pays the factor.

Do you do payroll for my drivers? Yes. Payroll is one of our two services, along with monthly bookkeeping.