Transportation & Logistics
Get there from here.
In the global economy, there is a huge opportunity for companies in this industry segment.
Enterprises of all sizes and descriptions need stuff – whether finished products, parts or raw materials – to be moved from one place to another. And with limited capacity, profits are virtually assured. But as with any business, there are potential pitfalls and headaches, most of which are finance-related.
Key Considerations
Financing.
Transportation and logistics companies require a tremendous amount of capital to stay in business. Equipment and facilities must be purchased and aintained. Qualified staff and appropriate fuel must be ready at a moment’s notice. And everything and everyone must be insured against any potential blip. Securing funding to sustain current operations – and even to expand – can be challenging.
Cash flow.
In addition to the overall issue of capital access, transportation and logistics companies frequently confront major problems with cash flow. In many instances services must be provided before payment can be received, and larger organizations have been steadily increasing the amount of time that elapses before they remit invoices. Disruptions – such as port strikes and backlogs can add further strain. And reliance on factoring to help bridge the gaps can take a significant bite out of profits.
Data.
Transportation and logistics are “old economy” sectors that are essential in the “new economy.” But many operators have had difficulty making the shift from manual and paper-driven processes to contemporary, comprehensive electronic data systems. Lack of – or fragmentation in – such systems can make it difficult to properly allocate costs and assess profitability of certain services. This can also complicate efforts to track assets, such as vehicles and monitor their value. Finally, lack of complete, up-to-date data can make it extremely difficult to perform effective tax compliance, potentially resulting in the loss of applicable tax efficiencies and increasing the risk of overpayment or penalties.
Singer & Falk helps companies in the transportation and logistics sectors get a solid understanding of all the factors that can impact their profitability and growth potential.
We collaborate closely with internal teams to set up data systems that work, and use the information gleaned from those systems to guide clients in making critical decisions that can help them more effectively manage costs while more strategically making investments. We assist clients in developing workable, sustainable approaches to financing and cash flow management, and we’re always available when questions come up or an unexpected event disrupts normal business. And of course, we ensure tax compliance in the most timely and efficient ways possible, taking advantage of available credits, deductions and depreciations.
Contact us when you need your accountant to deliver more than just the usual.
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