Managing your trucking company’s books is one of the most essential actions you can do to help it succeed. We’ve developed a list of 10 Smart Tips to Master Trucking Bookkeeping. From knowing your company entity type and utilizing a business credit card to lowering day sales outstanding.
1. Keep every receipt, no matter the charge
You want to deduct as many valid expenses as possible. Keep an envelope in your van to gather receipts, or utilize e-receipt files on your computer or in the cloud. Use the folders for accurate quarterly tax calculations and monthly profit-and-loss statements.
2. Keep Your IFTA Data Up to Date
Keeping track of your IFTA data is one of the most crucial aspects of owning a trucking company. You must submit an IFTA report detailing the miles traveled and gallons purchased at the end of each quarter. These reports will establish whether you still owe tax or whether you are entitled to a refund. The IFTA office in the home state of your trucking firm will notify you of your refund or debt.
3. Use a different credit card for business costs
Using a company credit card may aid in the simplification of your bookkeeping, and most accounting systems link with your bank and credit card accounts. Because the data is automatically entered whenever a payment is made, it saves time and eliminates any mistakes. Having a company credit card will also help you to simplify your bookkeeping because you can typically categorize costs like petrol, meals, and maintenance.
The first step is to look at several possibilities and choose one with a cheap interest rate and no annual charge. Given how much truckers spend on petrol, credit cards with fuel benefits are great. You prevent large interest costs, make sure to pay your debt in full each month.
4. Know Your Cost Per Mile
Regardless of the number of miles traveled, your variable expenditures per mile, such as fuel, should remain fairly consistent. As the number of miles traveled grows, your fixed expenditures per mile, such as insurance, should decrease dramatically. To identify patterns or areas for improvement, you may want to compute cost-per-mile separately for each category, such as drivers, equipment, states, or consumers.
5. All of your log books should be saved.
Your logbook and/or electronic log records are your greatest proof of per diem eligibility (primarily composed of meal costs). If you rely only on your electronic logging device (ELD) for truck driver bookkeeping, ensure that you can preserve and access your past. In any case, knowing this is a must for inspections.
You should require your truck drivers to preserve three sorts of documents: trip reports, expense receipts, and maintenance receipts—and make sure they carry a notepad in their vehicle to record mileage and any expenses for which they do not receive a receipt.
Logbooks are your greatest proof of eligibility for per diem expenditures, which are mostly food expenses. Keep track of what specific payments are for, even if they aren’t immediately recorded since this will allow you to deduct as many genuine charges as possible.
6. Save all your records.
All records used to compile your tax return must be kept for three years from the date you submitted the return. All IRS quarterly estimated tax payments, monthly profit, and loss statements, insurance documentation, maintenance records, warranty information (which should be available immediately to keep your truck on the road), registration information, settlement and bank statements, trucking business credit card statements, and canceled checks should also be kept.
7. Maintain a notebook in your truck.
To comply with IRS laws, truckers must track the date, location, amount, and justification for each charge. Use this notebook (together with your receipt envelope) or a document on your computer or smartphone to record any costs for which you do not have a receipt. This covers situations such as washing your truck at a coin-operated facility or recording miles for work usage of your own vehicle. Provide your business services provider or tax accountant with a monthly record as well as any additional receipts.
8. Regularly review your finances.
Electronic invoicing and payments make sending and paying invoices, as well as receiving money, easier and faster. You no longer need to wait for a physical check to clear. Keep track of the money coming in and going out of your bank account to ensure you are paid what you’re entitled.
Check your bank accounts for spending to ensure they are real, especially if you are not the only one with access to the account. If there is a disparity, you want to identify it as soon as possible before it becomes a major problem for your trucking company.
9. Discover the Finest Accounting Software.
Whether you’re an owner-operator or operate a small trucking company, the correct accounting software can help you maximize your company’s performance.
No matter the size of your company, it’s also critical to keep thorough records on mileage and excursions. All of this information, as well as transportation management capabilities such as fleet maintenance tracking, will be provided by the optimal accounting system.
10. Choose the Best Payroll Solution.
Payroll processing for a trucking firm might differ from that of most other sectors. Working with the appropriate payroll provider can be the key to saving time and needless paperwork because drivers can be rewarded by the truckload or kilometers traveled rather than receiving a monthly or weekly salary.
Ideally, you should be able to manage unusual payroll issues and meet trucking-specific standards while also simplifying compensation calculations. Depending on the size and demands of your company, you may be better off with basic software or with transportation management tools.
Regardless of the size of your fleet or how long you’ve been in business, understanding trucking accounting best practices can help you stay in compliance with industry-specific requirements. It will also assist you in making educated decisions and positioning your firm for future development. As a result, you should use these trucking bookkeeping techniques to boost profitability and save time.