Keeping accurate records of all expenses is essential for a trucking company. It can help you plan for profitability and make informed decisions. It can also lessen the possibility of IRS audits and financial errors.
Besides tracking mileage and fuel costs, trucking accounting should include dispatch services, invoice management, IFTA compliance, and employee payroll. A good software solution can simplify these processes and save time.
Keeping Track of Payments
Whether you have a trucking accountant or are handling the books, trucking accounting is critical to running your business. It helps you comply with industry-specific standards and gives you a clear picture of your company’s health. It can also help you spot problems before they arise and make informed decisions to improve profitability.
One of the most critical aspects of trucking accounting is keeping track of payments. Ensuring your invoices are paid on time is necessary, allowing you to maintain a positive cash flow. It’s essential to choose an invoicing system that is easy to use and enables you to create financial reports quickly.
Another aspect of trucking accounting is making quarterly estimated tax payments, which federal and state regulations require. These payments cover income and self-employed taxes, so keeping track of them is crucial to avoid fines and penalties.
Using a receipt scanner like Shoeboxed makes it easier to track expenses and mileage while helping you stay organized and IFTA compliant. It’s an excellent way for owner-operators to save time and avoid costly mistakes when organizing their documents. It also makes it much easier to file taxes when the time comes. And if you ever get audited, you’ll have all your documentation to prove that you made the correct deductions and weren’t trying to cheat the IRS or your state.
Keeping Track of Expenses
One of the most important things to do in trucking accounting is to keep track of your expenses. It will help you determine your business’s profitability and identify improvement areas. To do this, you must record all incoming cash and outgoing payments. You can use a simple spreadsheet or a specialized app to record each expense’s dates, locations, and cost.
It is also a good idea to record the reason for each payment since the IRS can ask for proof of these expenses for up to seven years. Using a fuel card is another way to monitor your expenditures. Fuel cards work like regular credit cards but save truck drivers money on gasoline. It is a great way to streamline your IFTA compliance and save money on taxes. It can also help you spot high-cost areas such as fuel, maintenance, or insurance.
Streamlining your trucking accounting is essential for small-scale operations and independent owner-operators. The best solution is an all-in-one trucking management system with built-in accounting capabilities. It allows you to manage all aspects of your business, including load management, invoicing, and financial reporting, in a single software program. Look for a cloud-based platform with a mobile app for on-the-go access and a rich feature set.
Keeping Track of Mileage
Tracking your mileage in trucking accounting is essential because it helps you save money and improve operational efficiency. An online mileage tracking system allows you to keep track of all your expenses, and it’s easy to see how much money you are making or losing with each load. You can also use this data to make changes to your business strategy.
For example, you might notice that you are spending too much on fuel and could cut back on other costs to improve your profitability. Another critical step in trucking bookkeeping is submitting quarterly IFTA reports. These reports list your total miles driven and gallons purchased, which will determine whether you owe taxes or are due a refund.
Submitting these reports on time is essential to avoid penalties and interest charges. Having a good understanding of your trucking company’s finances is crucial to your business success.
Keeping your personal and business expenses separate is a best practice in trucking accounting. It will help you avoid miscategorization errors when filing tax returns. Having a dedicated notebook or small box for all your receipts is also helpful so you don’t mix them up with personal items. Also, checking your bank accounts is good, especially when receiving or paying invoices.
Keeping Track of Fuel Expenses
Keeping track of fuel expenses is one of the most essential trucking accounting tasks. It allows you to monitor your financial performance and make informed decisions about the future of your business. Whether you use a simple notebook or an app, recording each expense’s date, location, and amount is essential. It will help you meet IRS requirements and provide proof of income for tax purposes.
In addition to tracking your fuel costs, it is also important to follow other expenses that may affect your bottom line. For example, if you need to wash your truck at a coin-operated facility or buy food on the road, you will want to record these expenses separately from your fuel.
Conclusion
Separating your business and personal expenses is essential to accurate trucking accounting. Many business owners need to avoid mingling their personal and business expenses, which makes it challenging to identify deductible expenses. You can prevent this issue by opening separate credit cards and checking accounts.
Another way to keep track of your fuel expenses is to use a receipt scanning service. These services allow you to mail in your receipts for scanning and filing, which can help you stay organized and save time. They can even help you with IFTA compliance, an additional accounting requirement unique to trucking companies.
