Trucking companies, whether independent owner-operators, long-established trucking fleet owners, or small startups, have a lot on their plates. They’re responsible for keeping the nation’s freight moving, meeting deadlines, and essentially keeping our economy going.
While many trucking companies believe bookkeeping is important, it’s understandable why it may not be at the top of their daily list of concerns. Mistakes with bookkeeping, however, can have long-lasting and serious consequences for your company. Want to keep your operation out of the red? Avoid these common bookkeeping mistakes:
- Throwing Out Receipts: Especially common in owner-operators is the failure to hold on to receipts. Many operators think some receipts are too small to be significant, but you can help yourself come tax season by saving all receipts and organizing them. Keep an envelope in your truck or scan receipts and save on your smartphone or computer (always keep the paper copy as an added measure).
- Inconsistent Bookkeeping: Everyday may seem unrealistic, but if you dedicate 10-15 minutes a day to managing your finances, it will reduce your odds of making a mistake and it will keep you in the know.
- Not Tracking Invoices: No cash means no business. If you’re not staying on top of invoices and receivables, then you will eventually find yourself hurting for cash. Make things easier on yourself by getting freight bill factoring that supports your cash flow. This is not a loan, but an advance on revenue you’ve already earned.
- Failure to Budget: Want to be money-wise? Create a solid budget and stick to it. Paying off your bills and waiting for the next check to arrive will not allow your business to thrive. Avoid this by making a budget that covers business expenses and accounts for reserve funds in case of unexpected costs (truck breakdowns, freight delays, etc.).
- Throwing Out Documents: While a document may seem like old news or you’re looking to make space, you shouldn’t be getting rid of any documents (unless they’re over a decade old). To avoid problems with Uncle Sam, it’s best to hold onto records used for your tax return for three years from the date you filed. Examples of important documents include IRS quarterly estimated tax payments, insurance documentation, and warranty information.
- Giving the Job to a Rookie: It’s not uncommon to see many trucking companies hand their bookkeeping off to a relative or friend that is not actually well-versed or trained in finance. While this effort may save money, it can potentially lead to complicated and expensive problems down the road. If you want to grow your business, you’ll need someone experienced to handle your books.
Doing your due diligence can ensure that you avoid these common bookkeeping mistakes. While a slip up every now and then is inevitable, there are some steps you can take to guarantee your trucking company doesn’t run into any major financial trouble.
Stay on track and avoid problems like cash flow issues by getting familiar with freight factoring. When you’re ready to get your no-obligation factoring rate quote, click here. One of Interstate Capital’s freight factoring specialists is ready to help!