When you’re an owner-operator, you have to wear a lot of hats, and while you may know a lot about trucking and the transportation industry, it’s understandable that accounting may not be your forte.
Unfortunately, even the smallest bookkeeping error could set you back or even worse, take you out of the game for good.
Why Bookkeeping Is Crucial for Trucking Companies
When it comes to the trucking industry, there are a lot of tasks to keep your books in order, like:
- Paying drivers
- Paying for repairs
- Billing and tracking payments on invoices
- Keeping track of taxes
And all of that’s on top of you driving the truck. Mismanaging these tasks could prove to be a huge problem for your business. If you want to avoid the headache of a bookkeeping mistake, you need to know what to look out for. Here are five pitfalls to look out for.
5 Common Mistakes in Bookkeeping
- Combining Personal and Business Expenses: Separate your expenses. If you don’t, you can muddy things up quickly. In the beginning stages of your business, you may use a personal credit card for business purchases without thinking twice, but it’s a good idea to keep everything separated. You’ll save yourself time in the future from having to sort out these expenses as well as save yourself from missing out on any potential tax write-offs.
- Failure to Track Invoices and Receivables: If you’re not on top of your receivables you won’t get paid. If you don’t get paid, you won’t be operating. Using tools like freight factoring can help ensure that your cash flow is where it needs to be plus you won’t waste time or energy on collections.
- Tossing Out Receipts: We’re not suggesting that you hoard every receipt you get, especially from personal expenses, but if it has to do with a business purchase, you’ll want to keep them. Doing so will make tasks, like doing your taxes, much easier and you can even use them as a guide for categorizing expenses correctly or setting budgets in the future.
- Miscategorizing Expenses: A telltale sign of mismanaged books is too many categories. If you apply for loans, this could work against you. Take the time when getting started to consult an expert and ensure you’re categorizing expenses correctly.
- Going with the DIY Route: It’s not unheard of for new or small businesses to try to take on accounting responsibilities in order to save money, but the truth is that if you really have no idea what you’re doing, you may end up costing yourself. Like we said before, small mistakes can have severe consequences and you may encounter unexpected expenses due to inexperience. Hiring a bookkeeper can save you time, money, and increase efficiency.
Staying on top of your bookkeeping and ensuring your trucking business is in good standing doesn’t have to be hard. Take advantage of all your available resources, like freight factoring from Interstate Capital. FreeFreightSearch.com offers members an exclusive opportunity for help with invoice factoring to keep your cash flow steady. 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.