No matter what business you own, your bookkeeping is very important. You need to keep track of your profits and expenses, in order to have a successful business. This is also true for owner operators, though it can be hard to keep track of everything when you are on the road.
However, that doesn’t have to be the case. Here are some tips to start your bookkeeping off right.
Save every receipt, even if you don’t think it is important. The best way to keep as much of your hard-earned money as possible is to deduct as many expenses as you can. So, keep all of your receipts, and you can decide later whether or not you should deduct it.
Keep track of your mileage. You are going to want to have a system for keeping track of your mileage. Many owner operators log in their odometer reading before and after every trip so that they know what their cost is per mile for that load. Others prefer to track their monthly mileage as a way to track the cost of their monthly loads.
Keep a notebook to have on hand. There are going to be times when you don’t get a receipt, but you still need to keep track of the expense. These may include things like when you grab a drink out of the vending machine or wash your truck using coins. You should also use this to help you keep track of your mileage. Every month (or whenever you settle up your bookkeeping), you should include this information.
Have an envelope in your truck for receipts. The easiest way to do this when you are on the road is to have an envelope where you can shove all of your receipts into. That way, you can go through all of them when you have more time.
And a filing system at home. Even if you don’t have a home office, you are going to want to at least have a filing cabinet that is dedicated to your business. Make sure that you keep everything that you haven’t logged into your accounting system separately so that nothing gets missed. Once you have logged it in, you can put it away in files that are labeled, depending on your expenses. You will want separate files for things like truck maintenance, fuel, dining, office supplies, and much more.
Keep your records. Even after the year is done, it is important that you keep your paperwork for at least three years (in case you are audited). You are going to want to keep any estimated taxes that you pay, your profit and loss statements that you have, maintenance information, registration information, bank statements, and much more. You are also going to want to keep your logbooks. Even if you use an electronic logging device, you are going to want to save your logbooks too.
Open a separate checking account for your business. You don’t even need to open a business account, which can come with extra fees. You just need an account that is different from your personal account. You will use this for all of your business needs. Everything that you get paid will go into that account. All of your expenses will come out of that money. You will even want to pay yourself. Not only is this good for business, it will help you keep track of your income and expenses. It is even more helpful if you get audited.
You should also get a separate credit card for your business. Just like you want to keep your personal and business accounts separate, you should do the same with a credit card. You should look around for one with a low interest rate, with plenty of rewards. Many owner operators use this for their fuel and other expenses when they are on the road. This is another good way to help with your record keeping, especially since some allow you to break your expenses into sections, including fuel and meals.
Hire an accountant if you can afford it. If you want to make sure that your bookkeeping is kept up-to-date (without any stress on your part), you may want to hire an accountant. If you are on the fence, think about all of the time that you will save, when you don’t have to take time out of your month to sit down and get organized. You may be able to do one extra run a month, which will pay for this expense — plus you can deduct it!
Though bookkeeping can feel scary, it doesn’t have to be. You just need to save every receipt that you get. Even if you don’t think it is important, you can always throw it out later. That is much easier than losing something that you needed! You should also keep a notebook to write down your income and expenses, when you don’t get a receipt. You should keep an envelope to store all of this information until you are able to get home and put it away in the filing cabinet. However, you should make sure that it gets logged before you file it away and forget about it!
Another way to help you keep track of your expenses is to have a separate checking account and credit card. Every month, you will be able to match up your receipts with the statements to ensure that you didn’t miss any. If you are able, you may want to hire an accountant. He or she will ensure that you have the right software to keep your records up-to-date. You may even send him or her all of your receipts so that you don’t have to go through them. If you are unsure about hiring one, think about all of the time that you waste doing your paperwork. You may be able to run one extra load a month to pay for this expense, making it well worth it.
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