Outside of your company’s stellar reputation, a stable roster of customers and a fleet that doesn’t need to be micromanaged, trucker bookkeeping keeps businesses afloat. Plus, bookkeeping for truckers is a fundamental step in making sure your expenses do not outweigh your profits.
With truckers filing taxes quarterly, it’s helpful to make sure your books are tidy and updated at all times. Doing so will help you save time and money, making it a solid baseline for accounting as a truck driver.
Whether you hire an accountant, call upon the help of an accounting firm, or do everything yourself, books that are free of errors, up-to-date and regularly monitored are a necessity for truck drivers. Keep reading to learn more about the fundamentals of bookkeeping for truckers, starting with what bookkeeping is in general.
What Is Bookkeeping?
Bookkeeping is one of the oldest processes of social society with almost every recorded form of human civilization having some type of number-based records. Bookkeeping is essentially the act of recording financial transactions in an organized manner.
Generally, records are recorded daily to ensure that the books are up to date. If carried out properly, the bookkeeping process is easy. However, if you stockpile your receipts, purchase orders, invoices or other transactions, you could end up with hours or even days of work ahead of you as you catch up with your backlog. So, it’s best to stay on top of bookkeeping from the very beginning.
How Does Bookkeeping Work?
Now that you know what bookkeeping is, let’s explore how bookkeeping works when it is put into action.
- Once a transaction is made, it will be attached to a specific account or project.
- Credits and debits are recorded respectively in said accounts.
- The credits and debits are added to a ledger.
- The entries are then adjusted at the end of every accounting period.
11 Basic Bookkeeping Tips for Truckers
Though bookkeeping is a catch-all term for a range of different processes, here are 11 basic bookkeeping tips for truckers.
Save Every Receipt
Start saving all of your receipts. By saving every receipt, you will create a saving grace for yourself when it comes time to do your taxes. In the unfortunate case that you end up being audited by the IRS, you’ll also have a paper trail to fall back on, too.
In today’s digital world, you do not have to keep a physical copy of every receipt that you accrue. Nowadays, there are plenty of apps that you can use to tag and catalog your receipts. From there, you can export the information directly for use in your ledgers.
Open a Checking Account for Your Business
There are definitely worse things than sorting through your personal and business transactions because they’re on the same account. However, there’s nothing more time-consuming than having to perform unnecessary work simply because you are overlooking a critical process.
Not only will separating your checking account give you access to large business checks, but it will also make it far harder for you to confuse what is personally yours and what is part of your business.
Use a Separate Credit Card for Business Purchases
Building credit for your business is important, but it is equally as important to make sure that your liquid cash flow is available when you need it. There are a host of credit cards designed for businesses with perks that will help you save money.
Deferring your expenses to a business credit card and paying them off in full before interest accrues can be a helpful way to purchase what you need right away. Just remember to pay it off before accruing interest.
Save Your Logbooks
Just like saving your receipts, keeping records of your log books is important, too. They can be digitized in the same way that receipts can, whether that be in a TMS or a digital logbook that declutters your office.
It is also advisable to store physical copies of your records somewhere safe. You never know when you might experience a hard drive crash, lose your phone, or delete your data by accident.
Your commercial vehicle is already legally required to have an ELD installed, and if it’s already synced to your TMS, make sure everything is in tip-top shape to avoid lost data.
Keep a Notebook in Your Truck
Not all businesses or self-serve operations provide receipts upon you making a purchase. For this reason, a notebook or specialized app is another way to stay on top of accounting as a trucker.
Make sure you jot down the dates, locations and costs associated with your purchases. Go ahead and mention the reason you don’t have a receipt as well.
Save Your Records
The IRS can ask you to provide supporting documentation anywhere from three to seven years after you file your taxes. That’s why it’s imperative that you keep a record of your expenses for years to come.
Whether you keep copies of your receipts in a file cabinet or you store your receipts in an envelope that you keep in your truck, always make sure you date your records. On top of this, it’s wise to have digital copies of everything as well because physical copies of receipts can sustain damage that makes them illegible.
Use an Accounting System
As mentioned above, a TMS or a digital logbook can make your life much easier. When choosing accounting software for truckers, you should look for a tool that can manage load orders, dispatches, invoices, expenses, payroll and billing while also being able to easily create International Fuel Tax Agreement (IFTA) reports.
Though plenty of accounting software fits the bill, we would recommend starting with TruckingOffice. You could also try a template for bookkeeping that is specifically for truckers, as offered by QuickBooks.
Update Your Books Daily
Bookkeeping is a part of business that must be tended to on a daily basis. By updating your books regularly, you can prevent overdrafts, underreporting and countless other easily rectifiable financial mistakes.
Review Your Finances Frequently
Even if you are updating your books daily, you still need to check your finances regularly. A major problem with bookkeeping for truckers is the sheer amount of credits and debits from all over the country that takes place as part of keeping your company in business.
Keeping track of your finances will give you a healthy view of your company’s financial status, especially when paired with a look at your balance sheet. It’s also a great way to view duplicate transactions that need to be removed or credited.
Make Your Books Audit-Proof
If you have performed all of these tasks thoroughly and successfully, your books should automatically be audit-proof. But just in case, you should review these steps and make sure that you have your records in order with physical records safely stored as well.
Do a Month-End Close
On the last day of the month, schedule time for yourself to do a month-end close. As the name suggests, a month-end close is the final moment to close out all of your accounts.
This is the important final step in making sure all of your transactions from the previous month are accounted for or reconciled.
Be the Bookkeeper of Your Own Destiny
Now that you know what you need to do, it’s time to start implementing good habits and putting your truck driver accounting processes to the test. For starters, you should make sure you have all of the tools you need. That way, you won’t be hung up on any part of the process. Start with a notebook, an app, a pen and some envelopes to begin keeping your books clean and tidy.
Quickbooks has all of the automation features that businesses need in order to automate, track time and keep track of what employees are doing on an hourly basis. While it’s not the simplest solution, it is the most robust option for other trucker bookkeeping needs.
Log everything. Keep your logs updated. Track all of your debits using an accounting system that you regularly monitor.
Quickbooks does not have a specific IFTA option, but by briefly customizing the software, this problem can be easily rectified.