The first thing every business owner should do to simplify their accounting is to separate their business activities from their personal ones. The easiest way is to capitalization rate definition open up a new checking account and credit card and reserve them for business use only. As a result, many truck drivers handle a significant portion of their bookkeeping without much assistance. For example, it’s usually best for a driver to keep track of their miles, fuel purchases, and meal expenses while on the road.
Plan for Necessary Expenses
Managing your trucking company’s books is one of the most essential activities that can be used to leverage its success. The next thing you should look for in a bookkeeping service is a secure online portal where you can view your digitized documents and review your profit and loss (P&L) statements at any time. With a secure online portal, you don’t have to go into an office or call your bookkeeper to access your information. This is especially convenient for truck drivers who are on the road and aren’t always able to go in and talk to their local accountant.
Because separating your business finances also helps with building business credit, you could choose to apply for a credit card and establish utility accounts under your company’s name. While we recommend even sole proprietors keep their business finances separate, this practice also provides a level of legal protection for S-corp and limited liability company (LLC) owners. In the event of a lawsuit or bankruptcy, separate accounts make it easier to demonstrate that the business is a separate entity from the owner’s personal finances. It can also enhance the professional image of your business because it shows customers and vendors that you have a separate financial identity and you’re managing your business responsibly. Bookkeepers help trucking companies keep track of financial statements and give them a better idea of how their businesses are performing.
Bookkeeping services not only make it easier to gain a bigger picture of your financial condition but pinpoint spots where your business can cut expenses or improve revenues. For large transportation companies, a CPA for truckers may be able to offer more services. Keeping your trucking company’s finances separate from your personal finances is one of the trucking accounting best practices as it will make it easier to track business expenses, income, and profits. With all of your transactions in one place, you’ll be able to identify deductible expenses and prevent confusion with personal expenses. Lastly, you want to look for a bookkeeper that will also calculate your tax estimates. As an owner-operator, you have to pay quarterly tax estimates based on your profit.
Keep Track of Upcoming Invoices
Even some CPAs are unaware of the specifics of the industry, where unique rules and changing regulations can cause you to misreport your tax-deductible expenses. IFTA compliance is one of the additional accounting responsibilities unique to trucking companies. Fortunately, it doesn’t have to take up too much time or energy if you plan ahead. To stay in compliance, file Form 2290 with the IRS and pay any applicable taxes by the last day of the month after the month you first used the vehicle on public highways.
FreshBooks Integrates with All Your Favorite Apps
- With TruckingOffice PRO, you can take care of most of your bookkeeping needs in the cab of your truck on your smartphone.
- When a trip is entered as a dispatch, the route computes the miles per state, which is confirmed by your ELD.
- Credit cards with fuel rewards are ideal, given the amount truckers spend on gas.
- Accounting is more sophisticated and analytical than bookkeeping, and there’s often more at stake.
- Apart from its robust human resources (HR) functions and reporting functionality, it can manage the pay processes of both driver and nondriver staff—all at an affordable price.
- It ensures your funds go to the areas where you used your fuel instead of the ones where you purchased it.
Waiting to invoice can result in payment delays and potential disputes over billing issues, which could strain the relationship with your customers and potentially result in loss of business. Timely invoicing also helps with maintaining accurate financial records and regulatory compliance. Accurate financial statements are a critical component to managing any business, and QuickBooks makes it easy to generate and send financial statements in just a few clicks. Another thing you should look for when deciding on a trucker’s bookkeeping service is a company that has industry-specific benchmarking. Ideally, you’ll want to look for a company that works with other truck drivers so you can compare your numbers to similar sized businesses in the trucking industry.
By using trucking bookkeeping services, you can keep everything organized and accessible so you can find what you need when you need it. Created by a professional accounting firm in Atlanta, Georgia, TranspoCFO provides quality bookkeeping services to trucking businesses. Ideal for small transportation companies without in-house accounting, their team of accountants can take care of your accounting and tax preparation needs so you don’t have to. Keeping accurate books may not be the most exciting aspect of managing your trucking business, but it’s essential to maintaining its success. So you can lessen your load, we’ve compiled a list of the best trucking bookkeeping services to make your life a little easier.
For example, you should be able to manage loads and dispatches and generate data that will help you file your IFTA reports, which is one of the trucking accounting best practices already mentioned. Small businesses, subsidiaries of international companies, foreign representative offices, NGOs, newly founded companies as well as larger enterprises need a qualified accountant. However, the establishment of an accounting division, hiring and training bookkeeping personnel and buying accounting software is costly. Such fixed cost companies, whose core competency is not accounting and bookkeeping, can benefit by outsourcing to professional accounting firm. The first thing you should look for is a bookkeeping service that will scan and archive all of your business receipts and important files.
It equals $100 plus $22 for every 1,000 pounds over 55,000 pounds up to $550 and 75,000 pounds. Because the IRS sees semi-trucks as qualified nonpersonal use vehicles, you must deduct your actual auto costs instead of using the standard mileage method. Keep records of each purchase’s amount, date, location, and business purpose. Truckers must choose between the two fundamental methods of accounting, the cash and accrual bases. They impact your tax return significantly, so consider consulting an accountant before choosing one. External DSO is the time it inventory carrying cost formula examples tips to lower it takes from your customer receiving the invoice to when it is paid whereas internal DSO is the time it takes for the invoice to be sent after the shipment was completed.