Over the Road May 2023

Why DRIVE YOUR CAREER!

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Publisher

Peter Charboneau

peter@otrgroup.ca

Director of Operations & Editor-in-Chief

Cathryn Charboneau cathryn@otrgroup.ca

Account Executive

Luke Zentil luke@otrgroup.ca

Account Executive

Earle Madden earle@otrgroup.ca

Graphic Design & Advertising lennykuiper.com

lennykuiper@gmail.com

Controller Estela Navarrete estela@otrgroup.ca

Office Manager Mary Charboneau mary@otrgroup.ca

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Networking. Support. Empowerment.

The Trouble With TAXES

In my research over many years, I have found that about 40% of all operators are about 1 year BEHIND in paying their taxes. In some situations, the amount is too high to sustain a household dependent on the income from operating a truck. Too often taxes are used as the ‘excuse’ for why an operator got out of the industry.

The blaming of taxes for failure is extremely misleading… it is a false narrative. Taxes do not cause operators to fail. Personal spending that is too high causes operators to fail. Sometimes abnormally high maintenance can cause operators to fail… but not taxes. Taxes are ALWAYS predictable. If the operator follows the rules of proper business cash flow, they automatically reserve cash for taxes. If an operator is self-employed, it is more difficult to determine taxes month after month, but it can be done if personal and business earnings are kept separate. If 30% of all ‘drawings’ from the business account is set aside for taxes, there will be no surprises. The problem is, trucking has significant cash flow. Lots coming in and lots going out. If the operator thinks too much or ALL that comes in is ‘personal’ and ends up

Robert D. Scheper

spending it… there will be nothing left for maintenance and taxes. That means that a one-year-old tax bill will cause a slow-motion financial ‘car wreck’ the following year.

Too many operators think that just finding the right accountant will solve the tax problem. If everyone followed the rules of taxation, every accountant would get the exact same tax dollars due. But, of course, they don’t. Of those who prepare taxes, most know what they are doing. The rules regarding using the TL2 simplified method are rather simple. The first 24 hours away from your home terminal are not usable. The rules are very clear and yet too many don’t count, or they ‘over count’ on purpose. I have a friend who was a local driver; we calculated his return as $1,500 and he went to another tax guy who got him $4,500. I asked if he told the guy he was local and not long-distance… he didn’t. If he gets audited, he pays it back… penalties and interest.

There is another guy who prepares taxes who has an amazing reputation for getting HUGE returns. This guy writes off everything that is given to him:

household food, lawn care equipment, parents as dependents (who live out of the country), haircuts… you name it. The key to his ‘success’ (albeit short success) is manually printing out the several hundred T1 returns he completes. The name of his ‘firm’ is nowhere to be found on the returns and his fees are in ‘cash’. So, when the taxpayer is audited… he will be on his own. I know several drivers who will be getting a $9,000 + refund. If they are audited… it is a temporary refund since the interest and penalty ‘financing fees’ will be astronomical… my guess is 15-30%.

I’ve been preparing taxes for over 30 years. I’ve seen cheaters come and go. Many get away with the actual fraud at the time… but I’ve seen where they end up in 20 years. They are just as broke and just as addicted to crisis. Over 20 of those years I have seen clients who pay their taxes on $30-40,000 income becoming wealthier than those who ‘cut corners’ or fudge their returns at tax time while making $80-120,000. It defies logic but I can’t think of any exception. If you want to be a good operator, learn the art of great cash flow management. Follow The Rules.

The simplest system to guarantee tax efficiency and safe money management is using non-taxable benefits. It saves operators on average $12,000 in taxes every year. Not only does it save $1 K

per month in taxes but if you follow the rules associated with corporate payroll, you never fall behind in taxes… ever. It was what I wrote my first book about. It’s what I have been referring to in these articles for over 14 years. Check out our PODCASTS.

About the Author:

Robert D. Scheper is a leading Accountant and Consultant exclusively serving the Lease/ Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His second book “Choosing a Trucking company” is the most in-depth analysis of the independent operator industry today. He has a Master’s degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars. You can find him at www.makingyourmilescount.com or 1-877-987-9787.

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Chris Harris

Preparing for an Insurance Audit

Thanks to your insurance provider, your safety department is one of the most critical areas of your company. It doesn’t matter if your ‘safety department’ is the owner of a small trucking company who also wears 12 other hats or a full-fledged, large company, twelve person safety department. Your insurance company demands that you have a strong safety department.

Why? Insurance is in hard times in a hard market. That means that rates are going up and, it is challenging to get or retain your insurance. Insurance will be expensive if available and perhaps it will not be available at all. What! No Insurance? What do you mean? Not possible! A hard market means that the insurance companies are not making a profit (I know, it’s hard to believe that with what they charge but it is true) and they are trying to clean up their accounts or ‘book of business’.

This hard insurance market means that an insurance audit is going to have a significant effect on your renewal and your rates. So if your company has a bad or perhaps a horrendous ‘loss ratio’ (meaning too many expensive claims), a high crash frequency rate or a bad safety rating, you need to be

prepared for the “Insurance Audit.” I know many of the insurance companies prefer to call the meeting a ‘review’ but I prefer to call it what it is; an audit. The audit can affect your company’s insurance premium easily by twenty percent. If you pass the examination but don’t do well, the insurance company could increase rates up by 10% or, if your audit knocks it out of the park they could easily knock off 10%. That is a twenty percent swing. 10% up or 10% down. You know how much you pay for trucking insurance so I’m sure you agree this is a substantial amount of money.

What can you do to prepare for this company defining day? One way is to perform a pre-audit. You can do this yourself and/or bring in an outsider. Many companies use an outsider; a person from outside your company to give a complete review. After all, if you perform your own audit and you are not aware of everything the insurance provider is going to review and each detail of the review, you may miss critical information.

What will the insurance auditor be looking for? There are many items so I will just discuss the major ones and this list is not in any order as they are all critical;

• Driver Hiring and Process - what are the standards for drivers and what training is provided during new-hire orientation

• Driver Files - complete with application, references and road evaluation

• Hours of Service management and reviews

• Maintenance Statement and interval

• Maintenance Files, full/total and meeting the maintenance interval

• Training

• Collision files

There is so much that they can review such as how are you investigating each collision, what steps did you take after a crash and what steps are you taking to ensure that a similar collision will not happen again or is less likely to happen again?

You need to be prepared, be trustworthy and know that you are going to hit this review/ audit out of the park. It is so important. The return on investment will be gigantic, enormous and humongous. Yup, it is that important.

How should you prepare? Be ready for the safety insurance person. Have as many of the documents, policies and files available as you possibly can and all within reach. You know what is going to be looked at so get it ready. Show the insurance reviewer that you care about the insurance relationship, that you understand how important safety is and demonstrate that you are taking actions.

The key to a successful insurance meeting is to be ready and have all regularly reviewed items in place and available.

Lastly, if you have had previous audits from the same company, then be ready to show how you have taken any previous suggestions seriously and what you have done to address the recommendation. This may be the last point but it is hugely important. Your prior actions demonstrate your commitment to safety if you have acted on the recommendation(s) and if you haven’t done anything, you’re inaction also speaks loudly.

Be safe out there!

Chris Harris

Top Dawg, Safety Dawg Inc. 905-973-7056

chris@safetydawg.com

@safety_dawg (twitter)

Keep Your Company Moving With Online Training

During this time of crisis, we need to ensure two things continue to happen:

● Continued transportation of vital goods and necessary food items.

● Open communication with drivers, dispatchers, and other employees.

COMPLIMENTARY TRIAL ACCESS WITH ONLINE TRAINING

We are offering 30-day complimentary access to our system to assist companies in maintaining driver safety training, including tracking and reporting. The Coronavirus pandemic has proven the critical need to Limit face-to-face interaction between employees. But how can your company encourage remote work and still bring on new drivers safely and effectively? How can you keep your drivers up to speed on safety content that would traditionally be covered in safety meetings?

Remote online training allows you to do both:

● Ensures participation and comprehension

● Consistently delivers important elements of your orientation

● Quickly gets your trucks moving safely

● Saves time, resources and money

● Simple to implement quickly and with very little effort on your part

There are no shortcuts when it comes to consistency and quality Infinit-I Workforce Solutions offers a communication and learning management system that allows you to simplify orientation through remote, online training. Spread Coronavirus awareness by distributing messages and policies from your company to your entire fleet.

to increase the Take advantage of our 30-day Complimentary Trial efficiency of your orientation. Keep your company moving!

For additional Coronavirus resources for Trucking & Logistics, visit https://www.infinitiworkforce.com/ppc/comp-access-cn-2/ www.infinitiworkforce.com

“Amazing support staff.”

Ellen Voie

Men As Allies (Be a Good Guy!)

The goal of Women in Trucking is to create a more gender-diverse industry. We are proud of the fact that fifteen percent of our members are men who join because they support our mission. In fact, there are men who serve on our Board of Directors!

Why should we encourage men to join forces with us to introduce more women to transportation careers? Besides being the right thing to do, it makes good business sense. A McKinsey report found “that the greater the representation (of women), the higher the likelihood of outperformance.”

Unfortunately, many men feel that gender-diversity is a women’s issue but, it’s a leadership issue that affects everyone in the organization. In the book Good Guys: How Men Can Be Better Allies for Women in the Workplace by David G. Smith and W. Brad Johnson, they break down relationships into three areas: interpersonal, public, and systemic.

The authors claim that men should take responsibility for creating a more gender diverse culture because “they have the influence and the power to create change, and they are crucial to altering the status quo.” Elevating women in the workplace

does NOT reduce the power of men and the greater influence of women in leadership is not a threat to men’s authority.

For men to be better allies, they first need to understand the perspective of their female co-workers. Ask questions and look for feedback. The authors suggest that men should be situationally aware of women during meetings and interactions. Note who is speaking the most and who appears to be comfortable. Is anyone being interrupted or belittled?

Be sure to eliminate sexist words from your conversation. At Women in Trucking, we use the term staff when referring to working at a trade show or conference (we can’t ‘man’ the booth.) Don’t assume women should take notes at a meeting and don’t expect her to bring the coffee.

Since the #MeToo movement, many men are concerned about mentoring or even working in proximity with women. The authors suggest a mixed-gender, small group to meet for coffee or lunch if this is an issue. Consider including your partner when meeting a female outside of the office.

Allyship (active support for the rights of a minority) includes speaking up when a sexist comment or event occurs. Take responsibility for intervening and implement the response. The authors even provide comments to make including: “Did you just say that?” or, “We don’t do that here.”

Remove the word female when you introduce someone - women don’t need to be reminded of their gender. Instead of female engineer, how about just calling her an engineer? Don’t make assumptions that women can’t or won’t do something such as travel for work when she has a young family. Let her decide if the duties are right for her or not.

The third area of allyship is for men in leadership positions in your company to act. If it doesn’t come from the top, it’s not going to happen. Don’t delegate diversity and inclusion initiatives to your human resource department (typically femalepopulated roles.)

Training is the key to a more inclusive culture. Talk about unconscious bias and learn to identify and avoid it. Establish employee resource groups or informal lunch discussions to understand the challenges minority groups experience. Set measurable goals and be sure to track your progress. Don’t just count how many women are hired but look at how many women have applied for a position.

You may be using the wrong terms in your recruiting efforts, as women are less attracted to words like hierarchy, aggressive, and risk taker. There’s a great deal of research on unconscious bias in recruiting, hiring, and advancing women in the workplace.

Goldman Sachs CEO David Solomon will not take a company public without at least one diverse board candidate, as the performance of boards with at least onewoman director outperforms those without women. That’s an example of allyship in leadership.

Women can’t change our industry unless men are supportive and in agreement that diversity is something we all need to champion. Be one of the Good Guys and be a better ally.

Ellen Voie President/CEO/Founder of Women In Trucking, Inc. ellen@womenintrucking.org www.womenintrucking.org

Mission: Women In Trucking was established to encourage the employment of women in the trucking industry, promote their accomplishments and minimize obstacles faced by women working in the trucking industry.