CPA Compilation Report for Transportation & Logistics Companies
CPA compilation reports built specifically for Ontario transportation and logistics companies. Truck financing, CVOR compliance, fleet CCA schedules, IFTA reconciliation, cross-border revenue, owner-operator vs. employee driver classification, operating ratio analysis. From $500. 900+ five-star reviews.
Why Transportation and Logistics Companies Need a CPA Compilation Report
Transportation and logistics companies in Ontario face a unique combination of financial reporting requirements. Truck lenders and leasing companies require CPA-prepared financial statements to approve equipment financing. Insurance companies require annual financial statements to set and reconcile commercial truck insurance premiums. CVOR (Commercial Vehicle Operator's Registration) compliance reviews include financial capacity assessment. Cross-border operators need financial statements that accurately reflect Canadian and US revenue for HST zero-rating and treaty benefit claims. CRA audits transportation companies for driver classification, fuel tax compliance and equipment CCA at a higher rate than most industries.
A trucking company that cannot produce CPA-prepared financial statements cannot get truck financing, cannot renew insurance at competitive rates, risks CVOR downgrades and cannot demonstrate financial capacity to freight brokers and shippers who require pre-qualification. The compilation report under CSRS 4200 is the minimum standard that satisfies all of these requirements. For our full transportation and logistics accounting services, see our transportation and logistics page. For a general overview of compilation reports, see our CPA compilation report page.
Who Requires a CPA Compilation Report from Transportation Companies?
| Who Requires It | Why | What They Review |
|---|---|---|
| Truck lender / leasing company | Equipment loans and lease-to-own agreements for trucks and trailers require annual CPA-prepared financial statements. Covenant testing: debt service coverage, working capital, equipment-to-debt ratio. Failure to submit triggers loan default provisions. | Revenue trend (growing or declining), operating ratio, equipment net book value vs. loan balance, accounts receivable aging, fuel cost as a percentage of revenue, debt service coverage ratio. |
| Insurance company | Commercial truck insurance premiums are based on fleet size, revenue and claims history. Insurers require annual financial statements to reconcile estimated vs. actual revenue and payroll. Undisclosed revenue results in premium adjustments and potential coverage gaps. | Annual gross revenue, fleet size, number of drivers (employees vs. owner-operators), payroll, US vs. Canada revenue split, claims history reconciled against operations. |
| MTO / CVOR | The Ontario Ministry of Transportation maintains the CVOR for every commercial carrier. CVOR reviews include financial capacity assessment. A carrier with deteriorating financials and a poor safety record may face operating restrictions or CVOR suspension. | Financial capacity to maintain safe operations: adequate insurance, equipment maintenance budget, driver training investment, WSIB compliance. |
| Freight broker / shipper (pre-qualification) | Large shippers and freight brokers require carriers to pre-qualify financially before awarding freight contracts. A carrier without CPA-prepared financial statements cannot demonstrate the financial stability shippers require. | Revenue history, insurance certificates, CVOR abstract, financial statements showing adequate working capital and equipment investment. |
| Bank / lender (operating line) | Operating lines of credit for fuel, maintenance and payroll advances require annual CPA-prepared financial statements. Banks test working capital ratio, accounts receivable quality and revenue consistency. | Working capital ratio, AR aging (freight receivables over 60 days), revenue per truck, fuel cost percentage, operating ratio. |
| CRA | CRA audits transportation companies for driver classification (employee vs. owner-operator), IFTA fuel tax compliance, HST on cross-border loads (zero-rated exports), equipment CCA claims and T5018 for owner-operators. | Revenue matched against HST filings. T5018 total vs. owner-operator payments. Equipment CCA schedule vs. actual fleet. IFTA fuel purchases vs. reported fuel expenses. |
Fleet Equipment CCA Schedule
The equipment CCA schedule is the most critical supplementary schedule in a transportation company's compilation report. Truck lenders evaluate the net book value of the fleet against outstanding loan balances. Insurance companies use the schedule to set equipment coverage. CRA audits CCA claims against actual fleet composition.
| CCA Class | Rate | Applies To |
|---|---|---|
| Class 10 (general motor vehicles) | 30% declining balance | Trucks (highway tractors, straight trucks, cube vans), trailers, refrigerated units. Most transportation equipment falls into Class 10. |
| Class 10.1 (passenger vehicles over $37,000) | 30% declining balance (capped) | Passenger vehicles used in the business costing more than $37,000. CCA is calculated on a maximum of $37,000 regardless of actual cost. Applies to company cars, not commercial trucks. |
| Class 16 (taxis and rental vehicles) | 40% declining balance | Vehicles acquired for use as a taxi, delivery vehicle or vehicle for short-term rental. Higher CCA rate. Some courier and delivery fleet vehicles may qualify if the primary use is delivery for hire. |
| Class 8 (other equipment) | 20% declining balance | Warehouse equipment (forklifts, racking, pallet jacks), office furniture, shop tools, dispatch equipment. Non-vehicle assets used in the logistics operation. |
| Class 50 (computer equipment) | 55% declining balance | ELD (electronic logging device) hardware, GPS tracking systems, dispatch computers, fleet management servers, in-cab tablets. |
Immediate Expensing on Fleet Purchases: CCPCs can fully deduct up to $1.5 million in eligible equipment in the year of purchase. A transportation company buying 3 trucks at $180,000 each ($540,000 total) gets a $540,000 deduction in year one under Immediate Expensing instead of 30% declining balance over many years. This is the most powerful tax tool available to fleet operators. Incorporate and purchase through the corporation. Transportation Accounting Services →
Key Financial Metrics Lenders and Insurers Review
| Metric | Formula | Benchmark |
|---|---|---|
| Operating ratio (OR) | (Total operating expenses / Gross revenue) x 100 | Below 95% to be profitable. 85% to 92% is healthy. Below 85% is excellent. Above 95% means the carrier is barely covering costs. Above 100% means the carrier is losing money on operations. This is the #1 metric every lender and insurer reviews. |
| Revenue per truck (RPT) | Gross revenue / Number of trucks in fleet | $180,000 to $280,000 per truck per year for long-haul. $120,000 to $200,000 for regional/local. Below $150,000 per truck indicates underutilization. Above $250,000 indicates strong lane selection and utilization. |
| Fuel cost percentage | Total fuel cost / Gross revenue x 100 | 25% to 35% of gross revenue. Below 25%: excellent fuel management or high-margin loads. Above 35%: fuel inefficiency, too much deadhead mileage or underpriced freight rates. |
| Driver cost percentage | (Driver wages + benefits + CPP/EI + WSIB) / Gross revenue x 100 | 30% to 40% for company driver fleets. 0% for owner-operator models (driver cost is in the O/O payment). Driver cost + fuel cost should not exceed 65% of gross revenue. |
| Maintenance cost per mile | Total maintenance / Total miles driven | $0.12 to $0.20 per mile for a well-maintained fleet. Above $0.25 per mile indicates aging equipment or deferred maintenance. Lenders and insurers view high maintenance costs as a risk indicator. |
| Debt service coverage ratio (DSCR) | (Net income + depreciation + interest) / (Principal + interest payments) | 1.25:1 or higher. Below 1.0 means the carrier cannot cover debt payments from operations. Truck lenders typically require minimum 1.2:1 DSCR. Below 1.0 triggers loan default provisions. |
Operating Ratio Is the Trucking Industry's Most Important Number: An operating ratio of 93% means $0.93 of every revenue dollar goes to expenses, leaving $0.07 in profit. A 5-truck fleet with $1.2 million in revenue at 93% OR earns $84,000 in operating profit. If OR slips to 98%, profit drops to $24,000. Every percentage point of OR on a $1.2 million fleet is worth $12,000. We calculate OR on every compilation report and identify the cost categories driving it above benchmark.
Cross-Border Revenue, HST and IFTA
| Item | Treatment | Financial Statement Impact |
|---|---|---|
| Revenue from US-bound loads (export) | Zero-rated for HST. Carrier charges 0% HST on freight moving from Canada to the US. ITCs on Canadian expenses are still claimable, producing HST refunds. | Shown as zero-rated revenue in the HST reconciliation schedule. A carrier with 60% US revenue receives quarterly HST refund cheques (ITCs exceed HST collected). The compilation report must separate Canadian vs. US revenue for HST verification. |
| Revenue from US-origin loads (import to Canada) | Taxable at 13% HST if the load destination is in Ontario. The shipper or broker pays the HST. The carrier charges and collects HST on the Canadian portion of the freight. | Canadian-destination freight is taxable revenue. HST collected must reconcile to the financial statement revenue. Mixed fleets (some US-bound, some Canada-bound) require per-load HST tracking. |
| IFTA (International Fuel Tax Agreement) | IFTA allocates fuel tax obligations across jurisdictions based on miles driven in each state/province. Quarterly IFTA returns filed. Fuel purchased in one jurisdiction but consumed in another creates credits or liabilities. | IFTA credits (fuel tax overpaid in a jurisdiction) shown as a current asset. IFTA liabilities (fuel tax owing in a jurisdiction) shown as a current liability. Net IFTA position reconciled to quarterly filings. |
| IRP (International Registration Plan) | Apportioned plates for commercial vehicles operating in multiple jurisdictions. Annual IRP renewal requires declared fleet value and jurisdictional mileage allocation. | IRP registration fees are a deductible operating expense. Prepaid IRP fees at year-end are shown as a prepaid expense (current asset). The compilation report notes should disclose the IRP jurisdictions and basis of allocation. |
| US withholding tax (freight revenue) | Generally no US withholding on freight payments under the Canada-US tax treaty. W-8BEN-E filed with US payers to claim treaty exemption. If not filed, the US payer may withhold 30%. | If US withholding occurs (W-8BEN-E not filed), the withheld amount is shown as a foreign tax credit recoverable. The compilation report discloses the foreign jurisdiction and treaty claim. We ensure W-8BEN-E is filed with every US payer. |
Owner-Operator vs. Company Driver: Financial Statement Treatment
| Driver Type | Payroll / Expense? | CRA Reporting | Financial Statement Line |
|---|---|---|---|
| Company driver (employee) | Payroll expense. CPP, EI, income tax deducted. WSIB premiums paid. Vacation pay accrued. | T4 issued. Payroll deductions remitted to CRA. WSIB premiums reported to WSIB. | Shown under "Driver wages and benefits" on the income statement. Payroll liabilities on the balance sheet. |
| Owner-operator (independent contractor with own truck) | Subcontractor expense. No CPP, EI, income tax or WSIB deducted by the carrier. | T5018 issued (if the carrier is in the "construction" or "transportation" reporting category). Many carriers are required to file T4A or T5018 for owner-operators. | Shown under "Owner-operator payments" or "Purchased transportation" on the income statement. Not included in payroll. No payroll liabilities for O/O payments. |
| Lease-operator (driver leases truck from the carrier) | Hybrid. The driver may be classified as employee or contractor depending on the lease agreement structure. CRA applies the two-factor test. | If employee: T4. If contractor: T5018 or T4A. The lease payments (truck lease deducted from driver pay) complicate the classification. CRA audits lease-operator arrangements frequently. | If employee: driver wages. If contractor: purchased transportation. Lease receivable may appear on the balance sheet if the driver owes lease payments. |
CRA Audits Driver Classification in Transportation More Than Any Other Industry: A carrier with 10 owner-operators at $80,000/year each who are reclassified as employees owes all unremitted CPP (5.95% + 5.95%), EI (1.64% + 2.30%), income tax and WSIB for every year under review. On 10 drivers over 3 years: $180,000 to $320,000 reassessment. We classify every driver correctly in the financial statements and document the two-factor test for owner-operators. Transportation Accounting →
Transportation Compilation Report from $500. Lender-Ready.
Fleet CCA, IFTA reconciliation, cross-border HST, driver classification, operating ratio. Built for Ontario carriers.
What Our Transportation Compilation Service Includes
| Service | What We Do |
|---|---|
| Year-end bookkeeping review | We reconcile all revenue (per-load or per-mile) to the general ledger, verify fuel expenses against IFTA filings, confirm equipment loan balances, reconcile owner-operator payments against T5018 and verify that payroll totals match T4 Summaries. |
| Financial statement preparation | Income statement with transportation-specific categories: gross revenue (Canadian, US, other), fuel, driver wages, owner-operator payments, insurance, maintenance, lease/loan payments, IFTA, licensing. Balance sheet with fleet equipment at net book value, IFTA receivable/payable, accounts receivable and equipment loans. |
| CPA compilation report (CSRS 4200) | The formal compilation report letter signed by a licensed CPA. Accepted by truck lenders, insurance companies, freight brokers, shippers and CRA. |
| Fleet equipment CCA schedule | Every truck, trailer and major piece of equipment listed with: year, make, model, VIN, original cost, CCA class, accumulated depreciation, net book value and Immediate Expensing claimed. Matched against equipment loan balances. This is the schedule every truck lender and insurer reviews. |
| IFTA reconciliation schedule | IFTA quarterly filings reconciled to the general ledger fuel expense. Jurisdictional credits and liabilities summarized. Net IFTA position confirmed on the balance sheet. |
| Cross-border revenue split | Revenue categorized as Canadian (HST taxable) vs. US-bound (zero-rated) vs. US-origin (taxable if Ontario destination). HST reconciliation prepared. Zero-rated export revenue documented for CRA verification. |
| Operating ratio analysis | OR calculated for the fiscal year with comparison to prior year. Cost breakdown by category (fuel, driver, maintenance, insurance, overhead) as a percentage of revenue. Variances identified. This analysis is included as a supplementary schedule for lender and management use. |
| T5018 / T4A for owner-operators | T5018 or T4A slips prepared for every owner-operator paid during the fiscal year. Payments reconciled against settlements. Business numbers verified. Filed by the deadline. |
| T2 corporate tax return | Corporate tax return reconciled to the compilation financial statements. Fleet CCA claimed (including Immediate Expensing). Cross-border revenue verified against HST. T2 included FREE for bookkeeping clients. |
| CRA audit support (FREE) | If CRA audits your transportation company's T2, HST, T5018 or driver classification, we represent you at no additional charge. Driver classification documentation, IFTA reconciliation and cross-border HST queries handled. FREE for every client. Compilation Report Services → |
Ontario Transportation Compilation Report: Real Client Results
Long-Haul Fleet, Brampton (8 Trucks, $2.1M Revenue)
A Brampton long-haul carrier with 8 trucks needed annual financial statements for the truck lender (equipment loans totalling $680,000) and the insurance company. The previous accountant did not prepare a fleet CCA schedule and reported all revenue as taxable (65% was zero-rated US freight). We prepared the compilation report with a truck-by-truck CCA schedule, reconciled equipment loan balances, separated Canadian vs. US revenue ($735,000 Canadian / $1,365,000 US zero-rated), filed for $42,600 in previously unclaimed HST refunds on zero-rated exports and calculated OR at 89.2%. The lender renewed all equipment facilities. The carrier also received the $42,600 HST refund within 8 weeks.
Owner-Operator Fleet, Mississauga (12 O/Os, $3.4M Revenue)
A Mississauga carrier dispatching 12 owner-operators had not filed T5018 slips for 2 years. CRA sent an audit letter requesting T5018 compliance and questioning whether the owner-operators should be classified as employees. We prepared 2 years of T5018 slips, documented the two-factor test for all 12 owner-operators (all owned their own trucks, had multiple clients, carried own insurance and invoiced the carrier), prepared 2 compilation reports and represented the carrier with CRA. CRA accepted the contractor classification for all 12. T5018 penalties negotiated from $6,400 to $1,800. Transportation Accounting →
Regional Delivery Fleet, Scarborough (5 Trucks, $840K Revenue)
A Scarborough delivery fleet operating 5 cube vans needed financial statements for insurance renewal and a new truck loan ($160,000). The insurance company had estimated revenue at $600,000 and was planning a $4,200 premium adjustment when they discovered actual revenue was $840,000. We prepared the compilation report, documented the revenue correctly, negotiated the insurance adjustment to $2,800 (by demonstrating the additional revenue was low-risk local delivery with zero claims history) and prepared the fleet CCA schedule that supported the new truck loan. Loan approved within 10 business days.
Cross-Border Carrier, Windsor (6 Trucks, $1.6M Revenue)
A Windsor carrier with 6 trucks crossing the Ambassador Bridge daily needed compilation reports for the truck lender, insurance company and CRA (HST audit). 70% of revenue was US-bound (zero-rated). We prepared the compilation report with full cross-border revenue split, IFTA reconciliation across 8 jurisdictions, W-8BEN-E documentation for 4 US brokers, fleet CCA schedule with Immediate Expensing on 2 new trucks ($340,000) and operating ratio analysis (87.4%). The CRA HST audit was resolved with zero adjustments because the zero-rated revenue documentation was complete.
10 Common Compilation Report Mistakes Transportation Companies Make
| # | Mistake | Consequence |
|---|---|---|
| 1 | Not separating Canadian vs. US revenue for HST | US-bound freight is zero-rated. Reporting all revenue as taxable means the carrier overpays HST and misses ITCs that should produce refunds. A carrier with $1.2M in US freight loses $156,000 in HST refunds if all revenue is reported as taxable. |
| 2 | No fleet CCA schedule in the financial statements | Truck lenders cannot verify equipment values against loan balances. Insurance companies cannot set equipment coverage. CRA cannot verify CCA claims. The compilation report is incomplete without a truck-by-truck CCA schedule. |
| 3 | Not filing T5018 or T4A for owner-operators | CRA requires reporting of payments to owner-operators. Failure to file: $25/day per slip penalties. CRA cross-references against the O/O's reported income. Missing slips trigger a full audit of the carrier's driver classification practices. |
| 4 | Classifying company drivers as owner-operators | CRA reclassifies drivers who use the carrier's truck, follow the carrier's schedule and work exclusively for the carrier as employees. Reassessment for CPP, EI, income tax and WSIB for all years. 10 drivers over 3 years at $80,000/year: $180,000 to $320,000. Transportation Accounting → |
| 5 | Not reconciling IFTA filings to the general ledger | IFTA fuel purchases should match the fuel expense in the financial statements. Discrepancies indicate unreported fuel purchases (personal use), IFTA filing errors or missing fuel receipts. Lenders and CRA both flag IFTA/GL mismatches. |
| 6 | Not claiming Immediate Expensing on truck purchases | A $180,000 truck at 30% declining balance produces a $54,000 deduction in year one. Under Immediate Expensing, the full $180,000 is deducted. On 3 trucks ($540,000), the missed Immediate Expensing costs $59,292 in deferred tax savings at 12.2%. |
| 7 | Not tracking maintenance cost per mile | Rising maintenance costs indicate aging fleet that needs replacement. Lenders and insurers view maintenance above $0.25/mile as a risk. Without per-mile tracking, the carrier cannot identify when a truck costs more to maintain than to replace. |
| 8 | Mixing fuel expense across personal and business use | If the owner uses a company fuel card for personal vehicle fueling, the personal fuel is a taxable shareholder benefit. CRA reviews fuel purchases against fleet mileage. If 5 trucks drive 600,000 km combined but fuel purchases support 750,000 km, CRA assesses the 150,000 km difference as a personal benefit. |
| 9 | Using a CPA who does not understand transportation accounting | Generic CPAs who do not understand IFTA, cross-border HST zero-rating, fleet CCA, operating ratio and owner-operator classification produce financial statements that lenders reject, insurers question and CRA challenges. |
| 10 | Late submission to the truck lender (delaying equipment financing) | If the compilation report is late, the lender cannot renew the operating line or approve new truck loans. Equipment purchase opportunities are missed. Interest rates may increase if covenants are not tested on time. We deliver within 30 days of receiving complete information. Compilation Report Services → |
Frequently Asked Questions: Compilation Reports for Transportation Companies
What Our Clients Say
900+ five-star reviews from business owners and carriers across Ontario.
Transportation Compilation Report. From $500. Lender-Ready.
Fleet CCA, IFTA reconciliation, cross-border HST, driver classification, operating ratio. Built for Ontario transportation and logistics companies. 900+ five-star reviews.