8 Simple Bookkeeping Tips For Truckers

The trucking business takes more than just transporting a load from point A to point B. There’s also plenty of tedious administrative work like bookkeeping that you need to stay on top of for a successful business. 

You don’t just handle bookkeeping to keep the IRS at bay. You also need it so you know what your money is doing and how to keep your business profitable. 

Most times the bookkeeping or accounting process can seem overwhelming for a truck driver, but there are a few things you can do to make it easier for yourself. We’ll share eight easy tips for you to make bookkeeping less of a hassle. 

8 Simple Bookkeeping Tips For Truckers

Open A Separate Business Account

While it might seem easier just to have all of your personal and business transactions pulled from one account, it’s likely going to cause you more of a headache instead. 

When it’s time to review your business expenses and income, you’ll have to sift through each transaction in hopes that you recall which ones are personal and which ones are for your business. This type of behavior may even land you an audit from the IRS. 

To spare yourself the trouble, open a separate account for your trucking business. If you’re a sole proprietor you don’t need the most expensive business account. You can simply open another personal account to keep your transactions separate. 

Save Your Receipts

Most times it probably doesn’t cross your mind to put away your receipt before it ends up in the trash. But trucking comes with a long list of expenses and you want to be able to deduct as many of those expenses as possible at tax time. 

Even if the cost seems too small to make a difference, you should still save your receipt. If you’re not a fan of taking up extra space in the cabin with piles of paper, you don’t have to! 

Instead, you can use an accounting tool on your mobile phone to snap a picture of your receipts for easy expense tracking. Once you capture the receipt you can catalog the expense and toss the physical receipt unless you need it as a warranty for a larger purchase. 

So you can take care of your taxes with all possible deductions accounted for. 

Maintain Your Records Daily

Keeping good records is so much easier when you take a few minutes each day to keep everything up to date. Let’s say it’s been a busy week and the admin tasks were the furthest thing from your mind. At the very least, make an effort to update your records each week.

You’ve probably heard the advice before, but it really is a simple way to stay on top of your finances. Knowing your financial situation enables you to make better decisions with your money. It also helps you maintain and grow a successful transportation business.

Save Your Logbooks

Your logbooks are an essential part of any trip you take because they are the best proof of your per diem expenses. Whether it’s an ELD (electronic logging device) or a paper log book, you can reference the history to see what your expenses were. 

Saving your logbooks is an easy tactic to manage your bookkeeping since it’s something you already have to do. Just make sure that the information you’re recording is complete and as accurate as possible to avoid raising any red flags for auditors.

Use Bookkeeping Software Built For Trucking

One of the best things you can do to manage your bookkeeping without moonlighting as an accountant is to use bookkeeping software that works for the trucking industry. Many solo truckers find it useful to work with cloud-based software like Lendio’s small business bookkeeping tool. 

It can be used from a laptop, tablet, or even your cellphone so your trucking accounting software goes everywhere you go. Use it to

• Track expenses
• Build financial statements
• Send invoices
• Monitor cash flow analysis
• Handle payroll
• Make tax preparation easier

Using the right small business accounting software for your trucking company can alleviate a lot of the extra work on your end. At the same time, it makes it easier to develop financial strategies that help your business grow. 

Use A Business Credit Card

In addition to having a separate account for your business transactions, you should have a business credit card as well. This helps you build business credit when the card issuer reports that you’ve paid it on time each month. It also helps you keep everything organized. 

Many credit cards interface with accounting software to make expense tracking a smoother process. So instead of manually entering the information for each purchase, everything syncs automatically.

Using a business credit card may also offer special perks that you wouldn’t get by using a regular debit card. Depending on which financial institution you choose, you could get a business credit card that offers cash back, airline miles, or redeemable points. 

Just be careful to look for a card that has a lower interest rate, and no annual fee so you can make the most of the rewards package. 

Know Your Cost Per Mile

For commercial truckers, the most pressing information is the average cost per mile. Why? Because it has multiple applications:

• It helps transportation businesses price their services appropriately based on the current rates. This makes your business more profitable.  
• It helps you determine areas of high cost so you can decide to cut expenses.
• Factoring in maintenance and repairs allows you to head off financial issues ahead of time. 

Finding your cost per mile is a very simple calculation. Just add your total fixed costs and total variable costs for the month together. Then divide that by the total number of miles driven within a month. It’s suggested to recalculate this number every six months. 

You don’t have to do the math on your own though. There are cost-per-mile calculators like this one from eCapital. All you have to do is plug in the numbers from your books.  

Minimize Your Days Sales Outstanding (DSO)

Days sales outstanding or DSO is a metric that shows how long it takes for your sales to be converted to cash. Cash flow is essential for any owner-operator to understand since it determines when your cash gets to you. 

The lower your DSO is, the faster money makes its way to your bank account. There’s also an internal and external DSO. External refers to the time it takes for your customers to pay you after getting an invoice. 

This might be negatively affected by factors like your customer satisfaction or client payment habits. 

Internal DSO is the time it takes for your invoice to be sent after finishing a shipment. For example, If it takes an extra day for you to create an invoice from a Word template after delivering a shipment then you’ve increased your DSO. 

An issue like this is easily remedied by using a trucking bookkeeping service that can streamline your invoicing.