Every trucking company runs on massive volumes of paperwork. But not all trucking companies manage their businesses—or handle their paperwork—the same way. Most small trucking companies or owner-operators track jobs with a journal and stow and save receipts. But many trucking companies collect, process, store, and access their digital data and use QuickBooks for trucking to run their businesses, too.
Careful accounting and bookkeeping practices aren’t fascinating by any stretch of the imagination. But they’re essential for owner-operators, helping to determine operational effectiveness, the amount owner-operators spent on business expenses, and tax-deductible items.
Furthermore, sound accounting practices (and the right technology) ensure your payment as soon as possible. Timely payment means you maintain strong cash flow and avoid complicated driver payment issues due to delayed payments.
Good accounting essentials for the trucking industry
Here are a few steps you can take to get yourself squared away with your accounting practices:
- Digitally or physically organize your paperwork on a per-trip basis—from current BOLs, fuel receipts, and all load information—to simplify invoicing, taxes, and any future revisits.
- Choose technology, apps, and a TMS to reduce manual entry, automatically calculate the fuel used, handle invoicing, easily integrate with QuickBooks for trucking, and take advantage of digital document management. Doing this will reduce time spent filling out paperwork and avoid inaccuracies.
- Carefully save and track your receipts, whether you gather them electronically via apps, electronic logging devices (ELDs), or notebooks and receipt envelopes, noting the location, amount, reason, and date of all the costs.
- Open a separate business credit card, paying the balance each month. If you’re the company’s sole owner, set up a second personal checking account and use it for your business to avoid business account fees.
- Store profit and loss statements, quarterly tax estimates, maintenance records, and insurance and warranty documents. While the IRS accepts digital scans, you may need original paper receipts for larger purchases.
- Invoice as soon as you complete a load to keep cash flow strong and avoid a backlog.
- Use freight factoring—also known as accounts receivables financing—to get paid faster.
The importance of accurate, timely driver records and driver payment
Your drivers keep your freight flowing. They work hard and want to get paid well for it. But their pay structures are often complex: Pay plus accessorial fees plus company bonuses; pay-per-hour; revenue share; or even pay per mile are just a few. There are many more pressing reasons to keep track of drivers’ hours:
- You must prove your drivers drove their prescribed number of miles to show your compliance with federal laws.
- Owner-operators must report distance records to the International Fuel Tax Agreement (IFTA), accounting for every mile each truck driver has traveled and their exact fuel calculations. Inaccuracies may prompt an IFTA audit and stiff penalties.
- Organized records help you avoid an IRS audit and simplify tax preparation for truck drivers by ensuring you receive reimbursements and reductions that will save your company money. For example, accessorial fees, such as loading/unloading, detention time, and stop-offs, may be reimbursed.
- Driver settlement can be problematic without technology like QuickBooks for trucking accounting software to provide accurate records. For example, when a shipper pays a carrier (or 3PL) who then pays their truck driver or independent owner-operator, long invoicing and payments processing times or errors can short-change the trucker, who may not know whom to contact about the discrepancy.
How QuickBooks makes life easier for truckers
Technology can help by creating rate plans for drivers that incorporate base pay, accessorial fees, surcharges, and bonuses. Trucks equipped with ELDs send trip data into the settlement solution that combines the driver’s rate plan to calculate pay.
Rather than manually tracking expenses, invoices, and mileage on paper, Quickbooks for trucking offers effective accounting software used by various businesses worldwide.