Being an owner-operator of a trucking business is as not as easy as simply sitting behind the wheel and doing your route. It also requires you to know how to properly keep your books. This may not be your strong suit, but it is an important aspect that you need to learn. Otherwise, you may end up paying more taxes than what you are supposed to. You also won’t be able to clearly see how much your profit is, or if you are actually losing money.
Yes, bookkeeping is, indeed, an overwhelming and time-consuming task. But with the help of the 6 tips below, you should be able to take care of this particular aspect of your business without any problem:
1. Keep All the Receipts
You should make it a habit to collect receipts no matter how insignificant they seem to be. Even if it just for 5 bucks, as long as it is a valid charge, it would still be to your advantage. All receipts that account for truck repairs and accessories, truck lease, supplies, communication equipment, office, travel expenses, and start-up costs are important.
In fact, you also need to keep proofs if you are paying a business loan, insurance premiums, as well as retirement plans. These are just some of the deductions that you can claim when it is time for filing taxes. Furthermore, if you keep all the receipts in one place, sorting them out when you work on your end-of-the-month accounting would be hassle-free.
2. Separate Your Business Account From Your Personal Account
Even if you are the sole owner, it is still highly recommended that you keep a separate account for the business. Pull out all business-related expenses from this bank account. This should make it easier for you to keep track of all the expenditures.
3. Use a Separate Credit Card for the Company
If you want to use a credit card for the company, then you should also get a separate one that you can utilize when paying for any business expense. However, as much as possible, you have to pay the balance in full on a monthly basis so you can avoid paying interest charges.
4. Organize Your Log Books
Aside from the receipts, your logbooks are another important proof of all your business expenses. With that said, you should organize and save them. As you pay for something, log it immediately, so you won’t forget. If you keep your books organized, you won’t have to worry about anything if you get audited later on.
5. Record Other Expenses With No Receipts
There will be times when you will come across some expenses that do not come with a receipt. What you need to do in that case is to still record them in a separate notebook. It is crucial, though, that you indicate the date, location, cost, and what the expense is for. The IRS is strict when it comes to such, so you have to be keen.
6. Keep All Your Records
Tax filing is another task that most truckers, or any business owner for that matter, dread. But this does not have to be that hard if your records are complete. You should keep all the necessary documents and arrange them per month and year.