Busy all year, and not sure which work pays
Your coaches are rarely idle. School contracts morning and afternoon, private hire in between and at weekends, rail replacement when it comes, your own excursions, a couple of long-standing works contracts. Turnover is healthy. But at the year end, the margin is thinner than you expected, and the question at the kitchen table is: which of this work is actually worth doing?
You have a sense that long-distance private hire pays and some school routes do not, because of the empty miles to the first pick-up and the gap in the middle of the day. But nobody has ever added it up job by job, because the figures are in different places.
Costs are recorded by vehicle and month, not by job
Fuel is bought on cards and recorded by vehicle. Driver pay is calculated per week. Maintenance is by vehicle. Revenue is by invoice. Nothing ties these back to the individual job or type of work, so profitability is a feeling.
- Fuel costs are known by vehicle, not by job.
- Empty positioning miles are not recorded separately.
- Driver time includes waiting and split shifts that are not linked to jobs.
- Vehicle costs (finance, insurance, maintenance) are not shared across the work each vehicle does.
- Tolls, parking and driver expenses are in separate records.
How you price and what margin you aim for are your decisions, and how costs are treated in your accounts is for your accountant. We provide the working.
Pricing and tendering on instinct
Without job costs, pricing relies on rate cards that may be years old, and tender prices on instinct. Work that loses money is repeated because it keeps vehicles busy, and work that pays well is not pursued harder because nobody knows it pays well. When fuel or wages rise, you cannot see which types of work are most affected.
The same is true for fleet decisions. Whether to add a midi coach or another 53-seater depends on which work pays, and that is unknown.
Job costing from your own records
We build job costing that pulls together what you already record.
- Each job's miles are taken from telematics or driver records and split into loaded and empty positioning miles.
- Fuel cost per job is estimated from the vehicle's recorded fuel use per mile over the period and the job's miles, using fuel card data.
- Driver cost per job comes from the duty time and pay rules, including waiting and allowances.
- Vehicle fixed costs are shared across the jobs each vehicle did, on a basis your accountant agrees, such as hours or miles.
- Tolls, parking, ferry and sub-hire costs are attached to the job from receipts and invoices.
- Revenue per job comes from your invoices in your accounts system or coach software.
- Jobs are grouped by type (school contract, private hire, rail replacement, excursion, works contract) and by customer, with margin shown for each.
| Cost element | Source |
|---|---|
| Miles, loaded and empty | Telematics or driver records |
| Fuel | Fuel cards and vehicle fuel use |
| Driver time and allowances | Duties and pay rules |
| Vehicle fixed costs | Accounts, shared across jobs |
| Tolls, parking, ferries, sub-hire | Receipts and supplier invoices |
Deciding from the numbers
At the quarterly review, the costing shows each type of work with its margin. One school route stands out, because it needs a long empty run from the depot and ties up a 53-seater all day for two short runs. Some private hire at weekends turns out better than expected. The rail replacement rates barely cover the empty miles to stations some distance away.
Those are conversations to have with the council at renewal, with your rate card, and with the rail replacement agency. When the next tender arrives, prices start from actual costs.
Do you know which work pays?
- Costs are recorded by vehicle and month, not by job.
- Empty positioning miles are not measured.
- Your rate card is several years old.
- Tender prices are set by instinct.
- You are unsure which type of work carries the business.