For many truckers, their bookkeeping arsenal consists of a checkbook, a couple of credit cards and a collection container for receipts (like a file box or a bag). If there's money showing in the checkbook then, hey, there's money. At tax time, they try to organize their receipts into some kind of order before dumping them on the accountant.
It's flying by the seat of the pants, hoping a blown engine or too many low revenue loads don't bring their operation crashing down. In the back of their minds, truckers know a haphazard system could be costing them. But how much?
Owner-operators are usually in the 25% tax bracket and as sole proprietors they pay a self-employment tax that brings that number up to around 40%. Not keeping track of receipts means losing out on deductions. For example, one lost $300.00 fuel receipt means $120.00 in tax effect. That can add up to a chunk of money over a year's time in lost deductions.
Another loss is the loss of time. As April 15th approaches, receipts have to be sorted, added up and written down in some fashion. Drivers who don't already have organized recordkeeping in place may come off the road for several days to get their receipts in order. They lose revenue while their cost of operations continues.
Not keeping up with taxes can result in penalties and interest for "failure to deposit timely" for those who need to pay quarterly. It's also easier to make the quarterly payments throughout the year than come up with a large one-time bundle. Staying on top of taxes can also alert the trucker if there are changes in his deductions.
But taxes aren't the only reason to keep good records. Records show where profit is getting eaten up and where profit is being made. Records provide the information necessary to track the "back end" of the business and make informed business decisions.
For an owner-operator, knowing where he stands throughout the year provides the information he needs to alter his course if necessary or seek advice on how to be more profitable. Lack of recordkeeping and business advice can keep a trucker in the dark until his mistakes come back to bite him.
So, is trucking software the recordkeeping answer for everyone? No.
For some people, computers are still a mystery. Finding a knowledgeable accountant with tax and business services is the best bet--one that generates profit and loss statements and other operational reports to keep the trucker on top of his business.
For those who are comfortable with computers, trucking software may be the answer to getting a handle on their business. Even the simplest software allows users to record income and expenses, calculate cost per mile, and generate P&L statements and other reports. More complex software provides users with the tools to record state mileage, calculate fuel taxes, create trip summaries, track maintenance, generate invoices, build quotes, verify settlements and more.
Trucking software might encourage some people to keep up with their operations, but somebody still has to sit down and learn the program. Someone has to input all of the information in a timely manner. And a professional should still review the numbers on a regular basis.
Top Picks for Trucking Software
If you're serious about buying software, ask yourself a couple of questions:
1.) What operations do I want to computerize?
2.) How much am I willing to spend on a program?
3.) Does the software generate the reports I need for accounting and taxes?
4.) Is there after-purchase support?
5.) When will I set aside time to learn it?
6.) How often will I update my files and enter in my receipts?
7.) Will I take the time to review P&Ls and reports?
8.) Am I losing money because of unorganized records?
Here are some of the top picks among owner-operators for trucking software. The programs' offerings range from bookkeeping and accounting tools to complex systems that will handle all the back operations of a small fleet. Visit their websites or call their sales departments for more information.
Phone: 1 800 697 5153
Profit Tracker and Profit Tracker Plus II
Phone: 800 846 1802
The Truckers Helper
Phone: 800 875 7435
Trucking Management Software
Phone: 800 293 9647
Written By: L.H. Gray