Couriers spend most of their money on vehicles and labor. Tracking both properly is the difference between knowing your real margins per route and guessing.

Track fuel by vehicle whenever possible. A fuel card tied to each van or truck makes this easy because every transaction comes through with the vehicle attached. If drivers use personal cards and get reimbursed, require receipts that show the date, location, and gallons purchased. Fuel is one of the largest expense lines for couriers and it should be categorized cleanly, not lumped into general expenses where you can’t see what each vehicle is actually costing you.

Repairs and maintenance need to be split between routine and major work. Oil changes, tire rotations, brake pads, and regular service are deducted in the year you pay. Major repairs that extend the useful life of the vehicle or restore it after damage may need to be capitalized. Either way, keep invoices that show what was done and which vehicle it was done to. The IRS expects this level of detail if they ever question a return.

Insurance is more than commercial auto liability. Most couriers also carry cargo insurance for what they’re hauling and sometimes umbrella coverage on top. Track each policy separately so you can see what each one costs and confirm the coverage matches your operation. Personal auto policies don’t cover commercial use, so if drivers are running deliveries on a personal policy, a single claim can wipe out a year of profit.

How you own the vehicle changes the tax treatment. If you bought it outright, you depreciate the cost over a set period or use Section 179 to expense more of it upfront when the rules allow. If you leased it, the monthly payments are deductible as a business expense. Either way, the vehicle has to be used for business, and personal use percentage reduces what you can deduct. Record this from day one because reconstructing it later is painful.

Tolls add up faster than most owners realize. If you have a transponder account, pull the monthly statements and code the charges to the right vehicle. For drivers paying cash tolls, require receipts or photos of the booth charges. Tolls are fully deductible as business expenses but only if you can document them.

Mileage records still matter even if you’re deducting actual vehicle expenses rather than using the standard mileage rate. You need to show what percentage of vehicle use is business versus personal. A simple log with date, starting mileage, ending mileage, and purpose works. Apps like MileIQ automate this if you’d rather not write it down. Without mileage records, the IRS can disallow vehicle deductions entirely during an audit.

Driver pay is where many courier operations get into trouble. If your drivers work set schedules, use your vehicles, follow your routing, and can’t decline work, they’re probably employees, not contractors. Paying W-2 employees means withholding federal and state taxes, paying employer payroll taxes, carrying workers’ comp, and filing quarterly returns. Paying 1099 contractors means issuing a 1099-NEC at year end for anyone you paid $600 or more. Misclassification carries real penalties from both the IRS and the state, and North Carolina has been actively pursuing these cases.

Delivery software fees are fully deductible and worth tracking on their own line. Onfleet, Circuit, Routific, OptimoRoute, and similar platforms charge monthly subscriptions or per-delivery fees. If you’re dispatching through DoorDash Drive, Uber Direct, or other last-mile platforms, those fees belong in their own category as well. Knowing exactly what you spend on technology helps when you’re evaluating whether a platform is paying for itself.

Pulled together inside bookkeeping built for freight and logistics, this level of tracking lets you see profit per vehicle, per driver, or per route. Without that structure, you’re running a courier business on instinct and hoping the bank balance keeps growing.

If your books aren’t set up to capture vehicle costs and labor at this level of detail, that’s something we work on regularly with courier and logistics clients. GMJ Accounting provides small business accounting, bookkeeping and tax services in Jacksonville, NC and across the Carolinas.