Tow truck bookkeeping: three payers, three speeds of cash

Every call starts on the dispatch ticket, not the bank feed

The dispatch ticket records what the bank statement cannot show: which truck ran the call, and whether it was a cash roadside job, a motor-club dispatch, a police-rotation tow, or a direct-bill insurance job. That distinction has to survive into the books, because the four payer types collect on completely different schedules, and one lump "towing revenue" line hides which of them is actually paying the bills this month.

We post from the dispatch log daily — call type, truck, driver, and amount — reconciled against the day's card batches and cash drop, with unbilled calls flagged the same day instead of discovered at month end. A call closed on the dispatch board but never invoiced is the most common leak we find in a new client's file, and it is invisible until the dispatch system and the accounting system are actually reconciled to each other rather than trusted separately.

Cash calls: reconciled daily, not audited annually

The private roadside call — a flat tire, a lockout, a tow home after a breakdown — is the only revenue that settles in cash or by card at the curb, and it is also the revenue the CRA looks at hardest in a cash-heavy trade. Drivers carry a numbered receipt book or a mobile invoicing app tied to the dispatch system, cash is counted and dropped the same shift it is collected, and the day's cash total ties to the day's completed cash calls before the deposit reaches the bank. A driver who forgot to log three calls last week is a pattern, not a coincidence, and it only shows up if cash is reconciled weekly instead of trusted at year end.

We also track cash calls against the dispatch app's own trip log, because a truck that shows several minutes stopped at a location with no matching invoice is worth a question — sometimes an honest missed entry, occasionally something the owner needed to know about sooner.

Motor clubs, insurers, and police contracts: three aging schedules

Motor-club dispatch pays a negotiated per-call rate, and settlement speed varies by club — the actual terms belong in the accounts receivable system, not in memory, because assuming one club pays like another is how a real cash gap gets missed. Insurer direct-bill programs and municipal police-rotation contracts typically run slower, often net-30 to net-60, and they are the accounts most likely to short-pay a mileage or after-hours surcharge that was never itemized clearly on the original invoice.

We age each of these four buckets separately rather than in one combined receivables total, because a business that looks current on average can still be carrying one payer's invoices well past ninety days without anyone noticing until the cash gets tight.

Storage fees and the lien-sale file

A stored vehicle earns a daily storage fee that accrues as a receivable against the vehicle's owner or lienholder — not as revenue you've actually collected — for as long as the yard holds it. Under Ontario's Repair and Storage Liens Act, an unclaimed vehicle can eventually be sold to recover towing and storage charges, but only after the prescribed notice steps have been given and documented; skip a step and the sale itself can become the liability. When a lien sale closes, we book it in two pieces: the outstanding tow and storage charges are finally recognized as earned revenue, and any surplus above what is owed is a payable back to the vehicle's owner, not a windfall. Lien-sale proceeds are treated as a taxable supply for HST purposes, the same as any other sale made in the course of the business.

We keep a running schedule of every vehicle in the yard, its accrued storage-to-date, and where it sits in the notice timeline, because a vehicle that has quietly passed its next notice deadline is a compliance problem long before it is a bookkeeping one.

The fleet: fuel, insurance, and CCA on the trucks

Running 24/7 dispatch coverage means fuel and commercial auto insurance sit among the largest fixed costs in the business, not variable ones — they barely move on a slow week. On the trucks themselves, light-duty wreckers generally fall into CCA Class 10 at 30 percent, while heavier rotators and integrated carriers above roughly 11,788 kg gross vehicle weight can qualify for Class 16 at 40 percent instead — worth confirming truck by truck rather than assuming one class fits the whole fleet. We reconcile fuel cards and insurance instalments monthly against the fleet list, so a truck still sitting on the policy after a sale does not go unnoticed until the next renewal. Dispatch and GPS-tracking software subscriptions get their own line too, since they are recurring costs that scale with the fleet and are easy to lose inside a general software expense bucket. The full monthly close routine — bank reconciliation, HST filing, financial statements — runs through our bookkeeping services, and the tax side of buying trucks and handling US-plated recoveries is on our tow truck cross-border tax page.