Towing Company Books: Dispatch Payments, Impound Fees and Fleet Costs

What towing books need to track

A towing business is not one number. It is the tows you ran, the dispatch fees you paid, the impound fees you collected, the fuel you burned, and the trucks you kept on the road. Each part needs its own line so your monthly income stays true.

When you track all of it by truck, you can see which rigs earn their keep and which ones cost more in fuel or repairs than the tows brought in. When you do not, you get one big pile of dispatch bills and fuel receipts and no way to tell whether the wrecker paid better than the flatbed.

Towing runs on the truck and the dispatch. Each rig gets calls from a dispatch service or a motor club. Each rig tows cars to an impound lot. Each rig burns fuel and needs tires and repairs. When the books hold the dispatch pay, the impound fees and the fleet costs on separate lines, the business makes sense. You can read more about how we keep these lines tied on our bookkeeping page.

Here is what a clean truck looks like.

When the dispatch pay, the impound fees and the fleet costs sit on their own lines, your per truck profit is real. When they sit together, a big fuel run looks like a bad month and the real tow earnings hide.

How dispatch payments show up by truck

A dispatch fee is what you pay a motor club or a dispatch service to send you calls. It is a cost, not income. It moves with every tow. It needs to tie to the truck that ran the call.

The clean way is to book each dispatch fee to a dispatch cost line tagged to the truck that ran the call. When the dispatch invoice clears, the cost lands on the right rig. When you run the profit and loss by class, each truck shows its own dispatch total. You can see which truck gets the most calls and whether the tow income covers the dispatch fee. You can read more about how we track fleet costs in our trucking books guide. The same idea works for a towing fleet.

The messy way is to book every dispatch bill to one general expense line with no truck tag. Now you can not sort by rig. You can not tell which truck runs the most motor club calls or whether those tows pay enough to cover the dispatch fees. The dispatch bills sit in one pile and the per truck story hides.

Here is how to keep dispatch fees clean.

• **Book each dispatch fee to a dispatch cost line: ** not to general expense.
• - **Tag the fee to the truck that ran the call: ** so the cost sorts by rig.
• - **Match the dispatch invoice to the bank: ** the day it clears.
• - **Watch dispatch fees as a share of tow income per truck: ** a rig that pays more in dispatch than it earns needs a look.
• - **Check the dispatch invoice against the call log: ** so no wrong charge stays.

When the dispatch fees tie to the truck, your per truck dispatch cost is real. When they float in one pile, the dispatch story is a guess.

How impound fees show up apart from tow income

An impound fee is what you collect when a car sits on your lot. It is real income, but it is separate from the tow charge. It needs its own line so you can see what the lot earns on its own.

The clean way is to book the tow charge to a tow income line and the impound fee to an impound income line. The two sit apart on the profit and loss. You can see how much each truck earns in tows and how much the lot earns in storage. When a car sits for weeks, the impound income grows even when the tows slow down. You can read more about how we keep income streams apart in our security installers guide. The same idea works for tow income and impound fees.

The messy way is to book the tow charge and the impound fee to the same general sales line. Now you can not tell how much came from towing and how much came from the lot. A month with a lot of impound fees looks like a great month for towing even though the trucks were slow.

Here is how to keep impound fees clean.

• **Book tow charges to a tow income line: ** not to general sales.
• - **Book impound fees to an impound income line: ** not to general sales.
• - **Track impound fees by car or by day: ** so the lot income is real.
• - **Watch the tow income and the impound income separately: ** so you can see what each earns.
• - **Match each payment to the bank: ** so no income floats untied.

When the tow income and the impound fees sit apart, your income is real. When they share one line, the lot income hides inside the tow pile.

How fleet costs show up by truck

A towing fleet runs on fuel, tires and repairs. Each truck costs money to keep on the road. The costs need to tie to the rig that spent them.

The clean way is to give each truck its own fuel card and book each charge to a fleet cost line tagged to that truck. Book each repair bill to a repair cost line tagged to the truck. When you run the profit and loss by class, each rig shows its own upkeep total. You can see which truck costs the most to keep on the road and whether the tows it runs cover the upkeep. You can read more about how we track fleet costs in our landscaping equipment guide. The same idea works for a tow truck fleet.

The messy way is to book every fuel charge and repair bill to one general expense line with no truck tag. Now you can not sort by rig. You can not tell which wrecker eats the budget in the shop or which flatbed burns the most fuel. The bills sit in one pile and the per truck story hides.

Here is how to keep fleet costs clean.

• **Give each truck its own fuel card: ** so the charges sort by rig.
• - **Book each fuel charge to a fleet cost line: ** tagged to that truck.
• - **Book each repair bill to a repair cost line: ** tagged to that truck.
• - **Watch fleet costs per truck: ** a rig in the shop every month needs a look.
• - **Match each fuel and repair bill to the bank: ** so no cost floats untied.

When the fleet costs tie to the truck, your per truck upkeep is real. When they float in one pile, the rig that eats the budget is invisible.

How to match each payment to the bank

Every tow charge, impound fee, dispatch bill and fuel charge has to match the bank. The cash comes in or goes out. The books need to tie the two together.

The clean way is to match each tow payment and each impound fee to the bank deposit the day it clears. Match each dispatch invoice and each fuel charge to the bank the day it clears. The amount in the books agrees with the amount that hit the bank. When a motor club pays on a card, the deposit lands net of the card fee. When a customer pays in cash, the deposit lands whole. The bank and the books always agree.

The messy way is to book the payment and never match it. Now the books show income that may or may not have cleared. A dispatch invoice that is still pending sits as a cost. A tow payment that bounced sits as income. You can read more about how we match payouts to the bank in our courier and delivery guide.

Here is how to keep the match clean.

• **Match each tow payment to the bank deposit: ** the day it clears.
• - **Match each impound fee to the bank: ** so the lot income is true.
• - **Match each dispatch invoice to the bank: ** so the dispatch cost is true.
• - **Match each fuel and repair bill to the bank: ** so the fleet cost is true.
• - **Reconcile the bank each month: ** so the cash total agrees with the bank.

When each payment matches the bank, your cash is true. When they float untied, the income drifts and the real profit hides.

How the month end close works

At month end, every truck needs its lines added up. The tow income, the dispatch fees, the impound fees, the fleet fuel and the repairs all pull together into one truck total. When the rigs roll up by class, you see each truck side by side.

We start with the bank. We match each tow payment, each impound fee, each dispatch invoice and each fleet bill to the cleared payment. We book the tow income to the tow line tagged to each truck. We book the impound fees to the impound line. We book the dispatch fees to the dispatch cost line tagged to each truck. We book the fleet fuel and repairs to their own lines tagged to each truck. We send you the profit and loss by class, a balance sheet, and a cash summary. Each truck sits inside the report in its own column.

Here is a simple month end check.

• **Match each tow, impound, dispatch and fleet payment to the bank: ** every payment cleared.
• - **Book tow income to the tow line: ** tagged to each truck.
• - **Book impound fees to the impound line: ** so the lot income is real.
• - **Book dispatch fees to the dispatch cost line: ** tagged to each truck.
• - **Book fleet fuel and repairs to their own lines: ** tagged to each truck.
• - **Run the profit and loss by class: ** so each truck shows in its own column.

When the close runs every month, the truck story stays clear. When it skips a month, the dispatch bills and fuel receipts stack up and the next month is harder to close.

A situation we clean up

The impound fees that all sat in the tow pile

A towing company runs four trucks and an impound lot. Every tow charge and every impound fee goes to one general sales line. Every dispatch bill goes to general expense. Every fuel charge goes to general fuel. No truck tags are used. At month end, the owner can not tell which truck earns the most in tows, what the lot earns in storage, or which rig eats the budget in the shop. The bank and the books do not agree because the motor club payments float untied.

Here is how we handle it. We turn on class tracking in QuickBooks Online and set up one class for each truck. We set up a tow income line, an impound income line, a dispatch cost line, a fleet cost line and a repair cost line. We go back through the open month and move each tow charge from general sales to the tow income line tagged to the truck. We move each impound fee to the impound income line. We move each dispatch bill to the dispatch cost line tagged to the truck. We move each fuel charge to the fleet cost line tagged to the truck. We match each payment to the bank. When we are done, the owner can run the profit and loss by class and see each truck in its own column, with the tow income, the impound fees, the dispatch costs and the fleet costs on separate lines. We set up a rule so the next tow charge carries the right class from the start.

Mistakes we fix

• Every tow charge and impound fee in one general sales line so the lot income hides
• Every dispatch bill in general expense instead of a dispatch cost line tagged to the truck
• Every fuel charge in general fuel instead of a fleet cost line tagged to the truck
• No class tracking turned on so no way to sort by truck
• Impound fees and tow income in the same pile so the lot earnings hide
• No match between the motor club payment and the bank deposit
• A dispatch invoice that is still pending sitting as a cost
• Card fees from motor club payouts buried inside net sales
• No profit and loss by class run at month end

Common questions

How do I track dispatch fees by truck? Book each dispatch fee to a dispatch cost line tagged to the truck that ran the call. Match the dispatch invoice to the bank the day it clears. Run the profit and loss by class so each truck shows its own dispatch total.

How do I keep impound fees apart from tow income? Book the tow charge to a tow income line and the impound fee to an impound income line. Track the impound fees by car or by day. Watch the two income streams separately so you can see what the trucks earn and what the lot earns.

How do I track fleet costs by truck? Give each truck its own fuel card and book each charge to a fleet cost line tagged to that truck. Book each repair bill to a repair cost line tagged to the truck. Watch the upkeep per truck so a rig in the shop every month shows up.

How do I match towing payments to the bank? Match each tow payment, each impound fee, each dispatch invoice and each fleet bill to the bank the day it clears. Reconcile the bank each month so the cash total agrees with the bank.