Truckers need to be skilled in several aspects to be successful in their field. Aside from getting to know their trucks extensively, they also need to exert the extra effort to learn accounting and bookkeeping basics. In doing so, they will be able to ensure that the income they generate from delivering commodities or transporting goods is greater than their overall overhead costs.
Only when they are successful in this feat that truckers will be able to reap substantial revenue that will keep their business thriving even in trying times. In line with this, below are some accounting and bookkeeping basics that every trucker should know.
Learn accounting terms
You may already be well-adept with various terms and jargon used in the trucking business, but it will help if you can expand your knowledge more by learning some basic accounting terms such as expenses and revenue as well as net income or profit. In this way, you will be able to understand accounting formulas better. This is because you need to familiarize yourself with these formulas to ensure that you are earning more than what you are spending for your business. These formulas will also be able to help you manage your business budget in a manner that increases your margin of profit.
List down expenses
One of the primary things that you should know as a trucker when it comes to keeping track of your cash flow is listing down your expenses. You need to start this task from the moment you acquire your truck. In case you were able to find a straight truck with sleeper for sale at a reasonable cost, the next thing that you need to factor in as part of your expenses is the cost of its maintenance. You also need to list down other overhead expenses such as your daily allowance to cover your food and other basic necessities while you are in transit.
To make sure that you are able to list down all of your expenses, keep a notebook in your truck. Otherwise, leverage on a mobile app or software that will allow you to record your expenses in real time. Make sure that apart from the cost, you always include the date in your records, as well as the quantity and item of the item that you have purchased.
Another accounting basic that you should not take for granted as a trucker is to compile all the receipts that you garner every quarter. These prove to be valuable when you already need to file and settle your tax dues later on because these receipts will allow you to deduct legitimate costs from the tax amount that you have to pay. To keep your receipts organized, use envelopes or folders labeled with the proper month and year when you acquired them. You can also explore online applications that allow you to store your receipts electronically for easy tracking.
Open a separate business account
You will be able to better manage the finances of your trucking business if you keep your personal finances separate from your business account. Thus, make sure that you open another account that is dedicated to the finances of your business. It is in this account where the budget for your overhead costs should come from. In the same manner, it should also be in this account where your collectibles should be directed.
If you intend to use a credit card, make sure that you get one that is only for business use. As much as possible, avoid using your personal credit card to finance the needs of your business in the same manner that you should not use your business credit card to fund your personal needs. In this way, you will be able to track the cash flow of your trucking business more seamlessly.
In this modern-day and age, there are already several apps and software available that you can use for accounting and bookkeeping. It will help if you take some time to study and learn how to use these apps because they will be able to automate your accounting and bookkeeping processes, eliminating the tedious task of having to manually compile all your financing records. Through the use of this software, you will also be able to minimize, if not totally eliminate, human error.
As a trucker, you should know your truck extensively because only then will you be able to ensure that it is operating at its optimum performance. However, aside from this, you also need to learn the basics of accounting and bookkeeping to ensure that your cash flow leans toward a positive trend rather than otherwise. Rest assured that in doing so, you will be able to pave the way for your business to grow and maintain its longevity.
Joie is the passionate writer and blogger of UsedVending.com. She enjoys writing and works at an amazing pace. Blessed with two adorable boys, she dreams of creating a successful career online. She also loves to write about parenting, home and family life, technology and gaming, as well as beauty and health.