The "cutout" is on the unfinished back side. Note that the top front edge is a tiny-bit rounded. The bottom-front edge is square, but it can be easily-filed to mimic the top-front edge. It is actually 5" tall , but only 7/16" deep.
Ladder rack works the best only other option is to run the extra length on the roof of your vehicle and strap down very well to prevent up lift.
Yes, it is actually 5" tall, but only 7/16" deep. The bottom-front edge is "sharp", but he top front is a bit rounded. However, it is easy to file the sharp bottom edge - to mimic the top rounded edge though.