How to pick Truckers Bookkeeping Software, is the question we are trying to answer. As a driver/owner operator/fleet owner you don’t need a degree in accounting to handle your books.
Bookkeeping and accounting software helps find your operating expenses and profits, it also helps you to find your organization’s tax liability.
Bookkeeping is a vital part of the operations of a trucking company. Even though many of the bookkeeping tasks can be performed manually, using Trucking Management Software will help you save a lot of time and reduce stress.
We are explaining below what to look for in a bookkeeping solution for truckers?
- Record (scan and archive) your files/bills/receipts:
- Some important points you need to be mindful of when choosing a bookkeeping software for truckers
Record (scan and archive) your files/bills/receipts:
Firstly, an owner operator/trucker or fleet owner should be able to scan and archive their bills/invoices/receipts easily. So that you don’t have to keep physical bill copies. A trucking bookkeeper should be able to archive important paperwork to their Truck Management System/bookkeeping database. Providing your bills/receipts should be as easy a taking a photo, scanning, or emailing the document. Mailing is the slowest option and it should last resort.
A bookkeeper by using your bills/receipts can arrive at the average monthly revenue, profit, and loss for your business. A good bookkeeper would be able to easily send any of your bills/invoices whenever it is needed after archiving.
Some important points you need to be mindful of when choosing a bookkeeping software for truckers
- What is your accounting system?:The accounting system is also very important, most business has a cash-based system> Here businesses count money when they receive a bill or pay an expense.
- Record your operational transactions daily: You should keep accounts daily, essential you should have a picture of what is going inside your business daily. Essential if you set up an accounting system it will only take minutes to record your accounting and trucking operation data in an orderly form.
- Handle the checks properly: Checks are almost as easy to use as cash, this invites fraud or misuse. Be sure that you sign the check neatly and legibly, this can avoid forgery. When you review canceled checks, see to it that I was issued and authorized by you for authorized expenses.
- Make use of a banking account with a monthly cut off: This is an often-overlooked rule of bookkeeping for truckers. This is also very vital for trucking business because co-ordinating your monthly records will prevent mistakes and misunderstandings.
- Keep your accounts audit-proof: This is not just connected to IRS and State fuel taxes matters. Keeping all records/bills/receipts of every business purchase for future reference is a good idea. Also, maintain separate checking accounts for your personal and business dealings. Keep digital copies of your bills/invoices in your digital secure folder on your computer. So, when IRS or others come calling, you will have all the proof of transactions ready with you.
Unbreakable (secure) online portal:
Bookkeeping software should have a secure online portal where you can digitalize your documents and review your profit and loss statements anytime. As a trucking businessman or an owner-operator, you should have the option to access your documents, ledgers, profit & loss, and other numbers without help from a CPA, accountant, or bookkeeper.
A secure account protects your valuable information with a password-protected interface. When you log in to your portal and review your data, you should especially look for a bookkeeper who clearly answers or clarifies your doubts without paying extra for that service.
A bookkeeper or solution you select should have enough data about your peers in the trucking industry so that you can use it for industry-specific benchmarking. Ideally, your bookkeeper should work with truckers so that you can cross-reference your numbers with other truckers.
Cross-reference or comparative analysis of industry peers will help you to find areas where you can improve and areas where you are doing very well now. A good bookkeeper would help you to make adjustments in your business to earn a whole lot and also reduce expenses to keep more profit.
Looking and finding a bookkeeper who does tax reconciliation is very beneficial for your trucking business. Your bookkeeper should make buckets and put (your expenses, income, or profit & loss rather than just blindly inputting data.
With tax reconciliation statements you should make sure that your bookkeeper has captured and accurately categorized your P&L statements and if there are missing items your bookkeeper should let you know and solve the discrepancies.
For instance, if your bookkeeper has access to your data and industry benchmarks will help you to find discrepancies in your numbers. Whether it be because you have forgotten to send some bills/receipts or because of any other reason.
If an average owner operator spends 30% of the expense on fuel and your account shows only 10%, then you will be alerted of this discrepancy by your bookkeeper. Then you can know where have you missed the bills/invoices/receipts. Or is it that you have only 10% fuel expenses.
Tax Preparation and Bookkeeping – Together
Finally, you should appoint a bookkeeper who would prepare your taxes. You as an owner operator need to pay quarterly estimates based on monthly profits. If your bookkeeper also does taxes, they can use your P&L statement throughout the year to let you know exactly how much your estimated tax payments should be.
By paying quarterly tax, you don’t owe additional interest fee or penalties to the IRS in the tax season. You should look for a bookkeeper who will help you to calculate the tax estimates so that you don’t pay more than you should to the IRS.
Having a bookkeeper who files taxes makes it easier to file your tax return. When your bookkeeper understands your business and has been keeping track of your revenue and expenses. Because you and your tax preparer are not scrambling to finish your books there will be a lesser probability of errors in your books.
If your tax prepare and bookkeeper work in unison, they can find all the legal deductions you are entitled to so that you don’t pay more taxes than your need to. So, you should know that giving bookkeeping and tax preparation to an organization or individual who has a history of working with you, helps you to reduce errors, bring swiftness and efficiency to the process.
A smart and robust bookkeeper helps your business to be (afloat) on the road. Using the above guidelines you can zero in on the best-suited bookkeeper for your business, who will help you make smart decisions that will increase your profit, reduce your expenses and tax liability.
Other urgent requirements for a owner operator:
Firstly, there are a few operational adjustments an owner operator should make while he/she is in the nascent stages of operation. Like enlisting a dispatcher to help you get good and well-paid loads.
Secondly, you need a good insurance agency/provider covering you for various circumstances/policy types. You need to take 3rd party liability, cargo, uninsured motorist, trailer/equipment insurance.
Thirdly, we need to enlist a factor who has competitive rates and above par service quality to make your business financial bottleneck free . This will help you to have a good cash flow and working capital.