Logistics and Transport Company Audit: Trips, Fuel and Fleet Costs

A transport audit checks that every trip run is billed, that fuel, tolls and repairs match the distance and load, that drivers' cash advances are settled, and that vehicles, permits and insurance are in order. Money leaks in small amounts on each trip, so the audit works on trip-level data.

Last reviewed: 17 October 2026. Facts checked. This post sets out an audit method. We did not run a web search for it and did not open any statute or notification. It names laws only so you know what to look up and gives no rates or thresholds. For goods transport agency GST, read our existing post and confirm current rates. We checked existing site posts to link only to pages that exist.

What is distinctive about transport and logistics

• Revenue is per trip, per kilometre, per tonne or per day, and is billed after proof of delivery.
• Many operators run owned vehicles and also hire market vehicles, so there are both revenue and a payable side for each trip.
• Fuel is the largest variable cost and the easiest to misuse.
• Drivers carry cash advances for fuel, tolls and expenses, which must be settled.
• Vehicles need permits, fitness certificates, insurance and tax, and each has an expiry date.
• Assets are tyres, engines and bodies that are repaired, replaced and sometimes capitalised.
• Warehousing and last-mile services add stock and handling risk.

Key risks

1. Unbilled trips. Trips run with no invoice, or billed at the wrong rate or weight.
2. Fuel misuse. Fuel bought but not used on the vehicle, or mileage far from the norm.
3. Driver advances. Advances unsettled or settled without receipts.
4. Repairs and tyres. Spares charged but not fitted, and tyre costs without tracking.
5. Hired vehicle payments. Freight paid above agreed rates or to related parties.
6. Detention and claims. Shortage, damage and delay penalties not provided for.
7. Tax compliance. Wrong GST treatment of freight, and TDS missed on payments to vehicle owners.
8. Lapsed documents. Expired insurance or permit, which creates both fines and uninsured loss.

Audit programme in steps

Step 1: Build the trip population

Obtain the trip register, lorry receipts or consignment notes, and GPS or tracking data if used. Reconcile the number of trips to billing and to fuel issued. Gaps between the three show where to dig.

Step 2: Test revenue completeness and rates

Select a sample of trips. Trace each to the invoice, the rate card or contract, the weight or distance and the proof of delivery. Compare billed rates to agreed rates. Look at trips with no invoice, and at invoices raised long after the delivery. See the order-to-cash checklist.

Step 3: Test fuel

Compare fuel issued or bought per vehicle to distance run, using odometer or GPS readings. Compute kilometres per litre per vehicle and compare to the norm for that vehicle type and load. Look for fuel bought at pumps far from the route, bills at unusual hours, and fuel cards used for several vehicles. Match fuel card statements to payments.

Step 4: Test driver advances and trip expenses

List advances given and settled for each trip. Check the settlement against receipts for tolls and other costs. Toll data can be checked against route records. Old unsettled advances are a flag for both loss and fraud.

Step 5: Test repairs, tyres and spares

For a sample of repair bills, check the job card, the vehicle, the parts fitted and the approval. Review tyre registers: purchase, fitment, kilometres run and disposal. Large spare purchases at year end with little fitted need attention. Use the inventory checklist for spares stock.

Step 6: Test hired vehicle costs

Compare freight paid to market vehicles against rates in the agreement and against the revenue on the same trip. Negative or very thin margins may mean rate errors or related-party dealing. Check that payments reached the vehicle owner or broker named in the agreement. See the procure-to-pay checklist.

Step 7: Review fixed assets and documents

Build a vehicle list with registration, owner, loan, insurance, permit, fitness and tax expiry. Verify a sample of vehicles physically or through tracking data. Check that vehicles on loan are in the asset register and that sold or scrapped vehicles are removed. Check that insurance covered the whole year and that claims receivable are supported. Use the fixed assets checklist.

Step 8: Test claims, shortages and penalties

Review customer claims for shortage, damage and delay. Compare provisions to claims received after year end. Check that insurance recoveries are recorded only when the claim is accepted.

Step 9: Test GST, TDS and statutory dues

Goods transport agency services have specific GST treatment, and reverse charge may apply to some recipients. Our GTA GST post explains the rules at a general level, and you must confirm the current rate and conditions. Check TDS on payments to transport contractors and hired vehicle owners, and test e-way bill compliance for trips. Confirm payroll dues using the payroll checklist.

Step 10: Review driver and staff records

Check driver licences, attendance and payments. Look for names on payroll who do not appear in trip data.

Common findings

• Trips with no invoice or billed below the contract rate.
• Fuel consumption far above the norm for some vehicles.
• Driver advances unsettled for months.
• Repair bills with no job card.
• Hired vehicle freight above the agreed rate.
• Vehicles on the road with expired insurance or permit.
• TDS not deducted on payments to vehicle owners.

Which Indian laws to check

Name only. Verify current text:

• The Motor Vehicles Act, 1988 and the rules for permits, fitness and insurance.
• GST law, including the goods transport agency provisions and e-way bill rules.
• The Income-tax Act provisions on TDS for contractors, and on any presumptive scheme if the operator uses one.
• The Companies Act, 2013 and CARO for company operators.
• Labour laws for drivers and helpers, including provident fund and ESI.
• State road tax and toll rules.

FAQs

How do you test fuel without a fuel meter?

Compare fuel bought to distance and expected mileage, and review unusual patterns by pump, time and vehicle.

What is the quickest revenue test?

Reconcile trips run to trips billed.

Why check hired vehicles?

They carry both revenue and cost, so rate errors and related-party deals show up there.

Related Articles

• GTA freight transport GST rate and HSN or SAC code
• Order-to-cash internal audit checklist
• Fixed assets internal audit checklist
• Procure-to-pay internal audit checklist

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