Bookkeeper for Local Delivery Companies

How does money come in for a delivery business?

Money comes in three ways: a customer pays you a delivery fee, the delivery is built into the product price, or an app collects from the customer and pays you a remainder. Each source has a different true margin, and each needs its own line in the books.

When you charge for delivery separately, a common structure is a base fee plus a per mile rate. Owners report charging in the range of $5 to $10 for the base, and between $0.50 and $1.00 per mile, though it varies widely by market and what you deliver (https://www.reddit.com/r/smallbusiness/comments/1c12fqx/whats_a_reasonable_delivery_price/).

When you bundle delivery into the product price, the delivery revenue is invisible inside the order total. You have to split it out as the delivery line and the product line yourself, or you simply cannot see what the delivery side earned. If you offer an unlimited delivery subscription, the money arrives before the deliveries happen. It is not all revenue the day it lands. It is revenue you earn as the deliveries happen, and the books should spread it across the subscription period (https://trexity.com/how-to-determine-a-delivery-pricing-strategy-as-a-service-business/).

If the order comes through a platform, the platform takes 15 to 30 percent of the order, plus monthly fees that show up in the range of $50 to $500 (https://cloudkitchens.com/blog/delivery-app-fees). That means the order total in your bank deposit is smaller than the order total the customer paid, and the difference is your platform cost. That cost belongs on its own line, not buried inside another expense.

What does one delivery actually cost?

A single delivery costs more than the customer's fee because the cost starts when the vehicle loads and ends only when the driver is back. The customers' fees get compared against it to know whether you are actually covering the cost.

One owner, discussing his own pricing, put his actual per delivery cost to about $6.16 (https://www.reddit.com/r/smallbusiness/comments/1c12zfzx/whats_a_reasonable_delivery_price/, a single web figure, not a verifiable industry average). That same range widely quoted to customers is $2 to $5, sometimes up to $10 (https://www.cnet.com/home/kitchen-and-household/cheapest-delivery-app-for-2023/). The mismatch is where the profit disappears.

If you decide your own price using this list, you get a number that covers the true cost of running the route, instead of one that covers only the fuel. And it is the same list you are probably missing at the end of the answer month, because the insurance bill and the repair bill do not arrive printed as delivery costs.

Which costs quietly eat the margin?

The profit margin for the industry has been dropping for five years, and the reasons show up inside your own books. The data from the industry research is that profit margin for couriers and local delivery services fell from 9.3 percent in 2021 to 7.2 percent in 2026, with the analysts putting the pressure on wage inflation, rising vehicle part costs, and compliance spending (https://www.ibisworld.com/united-states/industry/couriers-local-delivery-services/1950/, a primary source).

At a 7 percent margin, a $100 order leaves about $7 for you after everything, and that has to pay for anything that breaks or any week quiet enough to cover your merchant fees. The big upfront items make this generous: a modern electric delivery vehicle can run $50,000 to $75,000 before any customization, and even a traditional van is a heavy purchase (https://www.asap-courier.com/post/cost-effective-delivery-solutions). That is indirect, not something you can attach to a single order, and it drives away if it sits on the wrong side of the book.

Some owners describe the apps, not the driving, as the real margin-covering the platform takes enough of the order that drivers are left with less than minimum wage once their own costs are subtracted (https://www.reddit.com/r/couriersofreddit/comments/zwlkum/considering_starting_my_own_delivery_service/). That is not a certain universal fact about every app. It is the reported experience of one need, and it is the right question to ask about your own numbers: is the app's price per service amount covering what the delivery actually costs you, or are you subsidizing it?

What has to be tracked separately?

In a delivery, the books need three separations, or the numbers can't be trusted: the product revenue from the delivery risk, the direct costs from the indirect costs, and then the per vehicle if you have more than one.

Follow your own goods and deliver them, like a restaurant selling food and delivering it, the flour and the fuel pass through the same month but belong on different pages. The product side gets its own cost of goods sold; the delivery side is its own operating expense. Mix them and your product looks more expensive than it is, and the delivery line looks cheaper than could be the case, so both of your pricing systems are wrong (https://trexity.com/how-to-determine-a-delivery-pricing-strategy-as-a-service-business/).

Inside the delivery costs, the direct costs like fuel and driver wages vary with each trip, but the indirect costs like insurance and vehicle ownership do not. The Penn State extension that looks at the business says to keep both, and to price for both, because a price based on the direct costs only just leaves you surprise every time the insurance bill comes (https://extension.psu.edu/the-economics-of-a-transport-and-or-delivery-business/).

If you run more than one vehicle, each one has to have its own cost line. One van that does 80 percent of the miles but gets 20 percent fewer miles per kilometer, another that sitting idles during peak, and they will look the same in a single blended engine about line. Separate fuel, maintenance and driver time should be visible per vehicle or per route or you lose touch with which asset pays for itself.

Which three numbers should you read each month?

There are three numbers that reveal more about a delivery business than the bottom line alone: cost per delivery, cost per vehicle, and days to get paid.

• Cost per delivery. Take your total delivery expenses, the fuel, driver time, maintenance, insurance and app fees, and divide by the number of trips. Compare that number to what you charge, it will show you where each dollar of success comes from or goes.
• Cost per vehicle. If the fleet has more than one car, give each vehicle its own fuel, maintenance, and depreciation line, and look at how they compare working months. One of them is a candidate for replacement; the data points to which.
• Revenue to payment. How many days between the invoice going out and money hitting your account. In local delivery, that number is a lot more useful than the revenue for predicting whether the bank can cover next week's fleet.

A set of books that shows only profit will not show you the second two. Build them and the leit paste is full of.

What if your biggest client pays 60 days out?

Your books can show a healthy profit when the bank does not, and that difference exists because a customer is slow to pay. Owners in the service industry report exactly this situation: the biggest customer is 60 days past on 15 day terms and ignores the late fee (https://www.reddit.com/r/smallbusiness/).

The profit and loss page is only half the story. It tells you what you earned, and it says nothing about when it turns your bank account. In this trade the other side matters, because your fuel bill and your drivers' wages are due while the biggest order is still an receivable, not a deposit. The books have a wiser response: the aging report, which shows how old each invoice is, who is late, and how many much disk value. A delivery owner who is waiting on one large account is carrying unpaid days that increase int in a month when road around them have to be paid in cash.