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Keeping the Books Straight for Truckers

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  • How do I know whether my trucking business is turning a profit?
  • How do I setup an accounting system for my trucking business?
  • Is there a one-size-fits-all book-keeping system for trucking businesses?
  • I do not want to learn how to do accounting, do I need to hire an accountant?
  • Staying organized is not one of my strengths -is running a trucking business for me?
  • I think my truck revenue was over $250,000 last year, but I can't tell where it went!
  • How do I keep track of which shipper or broker owes me money?
  • I think the economy is busting my truck business, -maybe?
  • My spreadsheet is out of whack! I can't tell whether the numbers are real or not.
  • Is there a way I can stick it to the man and win in my small trucking biz?
  • Do you hate doing Taxes?
  • Do you know how much your trucking business made last month?
  • Can you provide accurate information about that load you hauled last month to Denver?
  • How much am I paying my owner-operators?
  • Do you have a clue who your customers are?
  • Do you need help keeping your bookkeeping up-to-date?

These are critical questions to ask yourself if you're in the trucking biz, and all too often we don't have straight answers to go along. It's hard enough to juggle all the responsibilities of running your business, let alone fit and keep all the puzzles in place.

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How do I pay my OTR drivers and owner-operators?

The trucking business provides unique challenges for business-owners when it comes time to paying employees who are rarely physically present at the office or main business location on payday. Truck drivers cannot be expected to try to make it back to the office so that they may pickup their weekly or bi-weekly paycheck, hence the challenge to small truck-business owners: How do you pay your over-the-road (OTR) drivers and owner-operators?

Book-Keeping Record System

The first challenge involves calculating the proper payroll numbers based on how you pay your drivers, i.e. by the mile, by number of hours worked, or on a load by load basis.

You should begin by setting up an accounting system that is appropriate for your type of business operation, and also easy to use. There are many good accounting software packages in the marketplace, but few make the grade when it comes to trucking operations.

TSC provides cutting edge accounting capabilities and book-keeping specifically designed for trucking operations. Using TSC, you should be able to run real-time reports that provide answers to such questions like:

  • How much is my paycheck this pay-period?
  • Can I get a summary of all miles ran in this pay-period?
  • Can you print the last 5 pay stubs for a specific driver or employee?
  • Can you print or provide a summary of all activity by certain equipment or drivers?

If your current system cannot answer questions like this in real-time, you should look into TSC -We can help.

Electronic Transfers and Payroll Cards

In my experience the easiest, safest and most cost-effective way to pay remote employees (workers who are not regularly based at the home office), is by payroll card. There are numerous vendors who provide payroll card services.

When selecting a payroll card vendor, choose one that has low transaction costs for both you and the employee. Some vendors charge you to load money on the cards, and also charge the employee for using the card -avoid those vendors. Choose one that has an upfront pricing strategy, and which also provides additional services like fuel and supply purchase management.

Check these tips for choosing a Payroll Card

In the past I have used T-Chek with great success, but there are others like Comdata and FlyingJ PDCA Money Card that work well, and are specific to the needs of the transportation industry.

W2 or 1099?

This is a frequently asked question for small business owners who use independent contractors in their business.

It is critical that you, the business owner, correctly determine whether the individuals providing services are employees or independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. If you are an independent contractor and hire or subcontract work to others, you will want to check the IRS website to determine whether individuals you hire are independent contractors (subcontractors) or employees.

Build an Effective Collection Strategy

Build an Effective Collection Strategy

Whether your small trucking business is sailing smoothly, treading water or moving against a strong tide during these tough economic times, having a reliable collection strategy is key to maintaining enough cash flow to remain solvent.

By taking a few measured steps, you can create a streamlined collection process to help boost your business' cash flow and alleviate concerns about how to handle late payments.

Consider these tips when developing your collection strategy:

  1. Create a tracking system. Develop a payment-tracking system that alerts you of overdue payments. The sooner you're aware of late payments, the sooner you can take action. Consider utilizing software specifically designed to track payments or consult your banker or financial advisor for suggestions about how to get started.
  2. Follow strict protocol for missed payments. With your tracking system in place, create a contract delineating clear payment guidelines so there is no room for client misinterpretations. Ask your clients to sign the agreement before providing your products or services. Have a letter outlining the consequences of a missed payment ready to mail, and follow up with a phone call to the client in case a payment becomes late. A phone call reinforces the importance of prompt payment and may provide additional insight about why the payment is late.
  3. Conduct credit checks. When working with a new client, it may be wise to conduct a thorough credit and background check. Consider enlisting the service of a professional credit check company or accessing credible, inexpensive online resources.
  4. Avoid extended payment terms. Try not to extend payment terms beyond 30 days when the economy is tight. If you have an existing contract that extends beyond 30 days, consider offering a discount for faster payment. Don't extend credit or terms unless you've verified that a customer is in a position to repay.
  5. Avoid spinning your wheels. If you are not having success with your collection efforts, consider enlisting the help of a collection agency or legal expert.

Consider incorporating the following tools into your collection strategy to facilitate increased cash flow:

Invoice your clients as soon as possible. The faster you can invoice your client, the quicker you can get paid. This is especially true if your client has time-based terms of payment, such as net 14 or net 7, etc. The clock usually starts when the client receives all completed paperwork and invoice. Trip Sheet Central creates an invoice as soon as all load details have been entered into the system thereby giving you the opportunity to submit the invoice as soon as your truck is unloaded.

Direct deposit. To facilitate faster access to funds, consider signing up for direct deposit, ACH transfers or Remote Deposit --a service that enables small businesses to scan deposit checks at their office and electronically transmit them to the bank. Most banks offer this service, and some financial institutions offer software that enhances clients' operating efficiency by integrating directly with their accounting software and enabling them to update their account receivables in one process.

With a reliable and efficient collection strategy in place, you can devote your valuable time to other key elements important to the ongoing success of your business.