Bookkeeping is important for practically every organization, especially freelancers and small businesses who handle all their accounting, financial decisions, and savings. The same is true for truckers and carrier businesses, who must cultivate solid financial skills and all their other talents. It’s a good idea to master bookkeeping for truckers if you want to stay financially successful!
But despite its importance, many truckers don’t know how to practice good bookkeeping, leading to financial headaches later. Today, let us break down eight tips to help you stay organized.
Why Is Bookkeeping Important?
Simply put, bookkeeping is important because:
- It allows you to see how much money you spend for each load or route, thereby letting you choose the most cost-effective or profitable loads for your business.
- It helps you keep track of finances and expenses, so you don’t overspend.
- It helps you file your taxes more easily – by maintaining accurate records, you’ll be able to get your tax return more quickly.
- And more.
Bookkeeping is key to understanding the financial side of your trucking business. When you run a trucking business, you bring in a lot of money and then spend that money to make even more. That constant economic circulation can be difficult to keep track of in your head and impossible to keep track of accurately with just a pen and pencil!
8 Bookkeeping Tips for Truckers
With that in mind, you need to know several important bookkeeping tips for truckers. These tips will help you keep accurate books and track your finances for maximum profitability.
1. Use Separate Banking Services for Business
For starters, always use separate banking services for all your business expenses. Never mix business and personal money whatsoever! Instead, have a separate checking account and credit cards for your trucking business.
Why? Having separate accounts lets you better track your business expenses, plus prevents you from feeling tempted to dip into business money for fun stuff or unnecessary personal purchases.
2. Save Your Financial Documents
Be sure to save every financial document you ever receive. You’ll thank yourself come tax time! Specifically, you should save your:
- Logbooks or electronic log records, which are the best proof of entitlement to certain expenses, like per diem expenses, you may need to charge your clients.
- Receipts for business-related purchases, especially those you incur while on a cargo route.
- Any other financial documents you can think of, including invoices.
3. Review Your Finances Monthly
Every month, sit down for a couple of hours and review your finances. Figure out your expenses and income, and see if you are doing financially well in your business.
If you are, keep going! If your business expenses were greater than your income for this month, see where you can make some changes to improve things before you get deeper into the financial hole.
4. Update Your Books Every Day
Your accounting books, like your invoices and receipts, should be updated daily. Updating your books prevents the work from piling up and becoming difficult to tackle later, like on the weekend.
5. Use the Right Accounting System
It's also advantageous to use the right accounting system, like an online or digital accounting platform. The right accounting system makes updating your books quick and easy every day (taking a few minutes at the end of every workday). It also makes retrieving complex financial information easy come tax time.
6. Ensure Your Books Are Audit-Proof
While updating your books is important, it's also important to ensure they are "audit proof." In other words, ensure the IRS will never find anything wrong with your books should they decide to audit them! Double-check your entries, don't “massage” numbers, and be honest when accounting for your expenses and income.
7. Keep a Notebook To Record Miscellaneous Expenses
Have some miscellaneous expenses you aren't sure how to categorize or that you aren't sure count as business expenses at all? Record them in a notebook if you don't want to put them in your accounting software. That way, you still know where your miscellaneous money went and can accurately see how much you need to earn to make a monthly profit.
8. Implement Limits on Monthly Spending
Lastly, don't forget to implement strict limits on your monthly spending. This includes both personal and business spending. Otherwise, you'll need to take on more and more clients and cargo loads to make a profit.
You should be able to determine the exact right limit on your monthly spending by looking at your average income and monthly costs. Derive an average, and you'll be good to go!
Should You Use Bookkeeping Software?
As a trucker, bookkeeping software is a good idea. The right bookkeeping software will help you keep track of your finances, file your taxes on time and correctly, and enable you to decide which trips are worth the cost.
Doing all this by hand is possible, but it’s time-consuming and tiring. With bookkeeping software, you can instantaneously or automatically input expenses and revenue, then determine the best route for your finances in the future.
What Are the Best Bookkeeping Software Options for Truckers?
There are many great trucker bookkeeping software options, but the below three are top options for several reasons.
QuickBooks Online With TruckingOffice Integration
QuickBooks Online is one of the most popular accounting suites in the market. TruckingOffice is an optional add-on that starts at $30 per month for one user. Put together, QuickBooks is arguably the best small business accounting software, featuring an integrated mobile app that you can use to scan receipts or send invoices while traveling.
With TruckingOffice added to QuickBooks, this accounting software features trucking management tools, accounting widgets, and more to help you send invoices, dispatch truckers, and track expenses effectively.
Tailwind TMS
Tailwind TMS is a robust and comprehensive trucker bookkeeping software suite. Although it doesn't have every accounting tool ever created, it does a great job at bill payment and invoicing tasks. It also lets you track bills and payments from different people involved in your business or operation. GPS Confirm Shipment, event tracking, and customer and carrier self-service portals make it an easy platform.
It starts at $117 per user per month and offers a free trial.
Rigbooks
Rigbooks is a highly affordable trucking management software platform, starting at just $19 per month. This cloud-based trucker management platform is perfect for managing your trucking business (and allows you to manage up to five vehicles at once).
With this software, you’ll be able to track business expenses, trips, orders, and even fuel mileage. This could be the best choice for smaller trucking companies primarily concerned about tracking costs per mile to understand which loads or routes are most profitable.
The Bottom Line
Trucker bookkeeping involves keeping the right documents, prepping the right files, and using the right software to streamline your financial decisions and minimize headaches. Bookkeeping is easier if you partner with the right logistics service, like RPM.
At RPM, we offer our carriers fair rates and help you keep track of your finances using our integrated app and other services. Contact us today to learn why shipping for RPM could be the best career decision you’ve ever made!
Sources:
Do You Need A Business Checking Account? | Forbes Advisor
IRS Audits | Internal Revenue Service
What kind of records should I keep | Internal Revenue Service
