Road transport and logistics operators, excluding shipping and aviation.
The fleet dominates the balance sheet and the finance cost, while revenue arrives in many small transactions, often billed after the service has been performed. Unbilled revenue at the period end is a recurring question.
Operating costs, fuel, tyres, driver payments, tolls and maintenance, are where control usually fails first, because they are incurred away from the office by people who are not accountants.
Accounting and reporting
- Vehicle and equipment accounting, depreciation, and replacement against repair
- Recognition of freight and service revenue, and unbilled revenue at the period end
- Operating cost capture and allocation: fuel, tyres, driver costs, tolls and maintenance
- Customer and supplier reconciliations
- Vehicle finance, lease classification and interest
Regulatory
- GST treatment of goods transport, including the reverse charge position where it applies
- Tax deduction at source on payments to transporters and contractors, and the declarations that affect it
- Presumptive taxation available to certain small operators, which changes both the books and the audit position
Internal controls
- Trip records matched to billing and to collections
- Fuel and maintenance controls, with consumption compared against norms
- Vendor payment authorisation
- Fleet asset registers with periodic verification
Questions that arise
- Is revenue recorded in the period in which the service was actually performed?
- Are repairs capitalised only where they meet the recognition criteria?
- Is the correct withholding and GST treatment applied to freight payments?
- Are declarations from transporters, where relied on, held on file?
Official sources
- GST portal (opens in a new tab)
- Income Tax Department (opens in a new tab)
- ICAI Accounting Standards (opens in a new tab)
This experience is in transport other than shipping and aviation.