Top 10 Amazingly Innovative Tips On Bookkeeping For Truckers

With so many duties in their hands, bookkeepers, accountants, or those truckers who are in charge of their own bookkeeping may need the help of the following tips to get on top of their business.

1. Update Your Books Daily

When should you organize your accounting books and how often is appropriate? Monthly? Weekly? Or just whenever you have time to spare? The advice is that it’s best to do bookkeeping every day. There are days when you think nothing much is going on so it’s alright to leave the boring task of sorting out receipts and bills for tomorrow. But chances are that you may be busy the next day, and by the time you get to do it, you will have forgotten some details of the transactions. Make it a habit to finish bookkeeping before you call it a day so that you don’t need to worry about such a problem!

2. Choose The Right Software

The abundant availability of bookkeeping and accounting software nowadays might make you spoiled for choice. For trucking businesses, a cash-based accounting system is a popular option because it allows you to record transactions when money is received or paid, offering a clear picture of your current income and expenses.

It’s also important to consider the unique features of truckers’ bookkeeping practices when trying out and deciding on the one software that matches your needs. For example, some trucking management software has tools that assist with dispatching and calculating IFTA taxes, those functions that will be definitely welcomed by many truckers.

3. Go Paperless

However organized you are, keeping physical documents can take up lots of space and make bookkeeping a burden. The solution is not difficult to find in this digital era. Scan your receipts and invoices with mobile applications such as Shoeboxed or mail them using our Magic Envelopes, and leave the rest to us. You will be surprised at how fast retrieving and categorizing data can be, regardless of whenever and wherever you are. Discover many more useful functions for trucking bookkeeping at shoeboxed.com.

4. Have A Different Credit Card For Business

Trucking owner-operators or small businesses tend to make the mistake of not separating their business account from a personal account. If you want to keep your business records in order, do yourself a favor and get a business-exclusive credit card. The last thing you want is to lose track of important paperwork, complicating the management of business records and finances in general.

5. Bank Checks? Check Them Twice

Like any other financial documents, bank checks must be kept in your books and preferably on the cloud too. But before that, it’s advisable that all contents of the checks are reviewed with care to prevent misinformation or fraud. Your signature should be clear and legible enough to be recognized, but it will be a problem if it’s too easy to forge.

6. Use A Banking Account With A Month-end Cutoff. 

Closing your banking records at the end of each month can benefit the business in several ways. Since all the transactions that occur within that month have been fully recorded and reconciled, we can ensure that the accounting data is complete and accurate. Properly organized data not only helps to simplify other accounting procedures including tax filing and audits but also informs the decision-making process.

7. Manage Your Cash Flow

Keeping your books properly will be a lot easier once you understand the ins and outs of cash flow. Even though your business is making profits, if you don’t manage cash flow well there are chances that you will be in the red because the available money at one point is insufficient to cover urgent expenses. Bookkeepers in trucking businesses should always keep an eye on cash flow, acknowledging its impacts on smooth operational activities that bookkeeping is part of.

8. Get Your Records Ready For Audits 

Audits accept both paper and digital documents, so fear nothing if you have everything at hand to substantiate all the transactions of your trucking business. You can carefully save and classify each receipt and invoice by yourself or entrust them to professional services like Shoeboxed, which turns your physical records into verified data that are ready for tax season.

9. Learn About Tax Deductibles

It’s a good idea to look into what can be deducted when you do bookkeeping. For example, if you are self-employed, expenses that are related to your business are generally tax-deductible. They include vehicle expenses (tolls, parking, maintenance, fuel, registration fees, tires, and insurance), specialized work gear, electronic devices used for work, work-related fees for drug testing, dispatch fees, leasing costs, etc. 

10. Seek Professional Advice

Despite being equipped with the right tools to support your bookkeeping and accounting practices, unless you are confident in your knowledge of finances it is necessary to have your questions or problems solved by a professional. Even when your business is doing well, advice from a pro who knows the trucking industry will give you valuable insight to improve the overall performance. Try to have your business financial health checked by experts in the field and you will see the difference that it can make.

Learning the ins and outs of bookkeeping from scratch may be a real challenge, but you can start with these simple steps that we have compiled just for you. Remember, good bookkeeping – happy driving! 

Important Must Know About Bookkeeping And Transaction Receipts For Truckers

To our dear truckers, how is your driving today?

We hope that as you are reading this article, you have returned from your trips safely and are having a good rest instead of struggling over all the transaction receipts that keep piling up every day.

This article is for truck drivers who start their own business, trucking companies, and anyone who is interested to know more about bookkeeping, its role in business, and suggestions on how to keep the books the right way.

Bookkeeping

What Is Bookkeeping?

To simply put, bookkeeping is the activity of keeping records of and organizing the financial affairs of a business. It mainly involves the recording of all the financial transactions that occur in the course of the business on a daily basis, ranging from sales earned revenue, earned interest, to payroll, payment of taxes, and operational expenses. Sounds like a lot of work, doesn’t it? The real responsibilities of a bookkeeper can be even more overwhelming, but they are considered an indispensable part of any business. Because every penny earned and spent is tracked by bookkeeping, it provides important source data for the process of accounting, which focuses on summarizing, classifying, analyzing, and interpreting this financial data. It is not an overstatement, therefore, to say that accounting starts with, first and foremost, proper bookkeeping that maintains accurate and up-to-date records.

Why Is Bookkeeping Important For Business?

For companies and organizations, many of their major functions depend on the information recorded in accounting books. Which products have been selling well? How profitable is the business at a point in time? What purchases have been made? Anything that may affect the income and expenditure of the business can be identified easily with good bookkeeping. Not only does it offer a realistic ‘snapshot’ of the business performance at a specific time, but bookkeeping also plays a fundamental role in helping business owners make strategic decisions on, for example, allocating its budget, making new investments, adjusting the workflow, or reassessing the financial plan. 

External users, including investors, financial institutions, and the government also rely on the information accessed through bookkeeping to have a comprehensive understanding of the business’s current situation and future prospects. Actions speak louder than words, but in the case of doing business, numbers speak loudest than all. Piles of receipts and their seemingly emotionless numbers, then, are not to be overlooked at all costs. Small and big businesses alike need to bear this in mind and ensure that their bookkeepers, accountants, or any other people and organizations that they entrust to carry out bookkeeping activities, are doing a decent job.

Transaction Receipt

What Is A Transaction Receipt?

A transaction is a completed agreement between a buyer and a seller to exchange goods, services, or financial assets in return for money. In business bookkeeping, a transaction may be recorded by a company earlier or later depending on the accounting system it uses. Accrual accounting recognizes a transaction immediately after it is finalized while cash accounting, used mostly by smaller businesses, instead records a transaction only when money is received or paid out.

Why Is It Important To Keep Track Of Transaction Receipts?

Since there are various transactions going on daily within a business that may get out of hand without adequate management, keeping track of transaction receipts as a kind of proof that something of value has been transferred from one party to another, is a must, whichever accounting system is being used. In other words, a receipt can be seen as proof of ownership that results from a transaction. A transaction receipt should show basic information of the sale or purchase such as the payer and payee, the value of the transaction, date when the transaction is completed, method of payment, and evidence of fund transfers. 

Strictly speaking, all types of receipts are necessary for the business to some extent, and we had better not take the risk of missing any of them, even when they are only cash slips for small cash payments. The Internal Revenue Service recommends retaining several types of receipts that document certain expenses for tax purposes, like cash register tapes, receipt books, invoices, credit card receipts, and statements, etc. Moreover, receipts are also required in basically any return/refund policy, making them an essential product warranty from the perspective of both sellers and customers. 

Taking the importance of transaction receipts into account, keeping them safe and sound is of high priority for the accounting department of any business. While conventional paper receipts are still in practice, they are now mostly used alongside digital receipts that are easier to be stored, preserved, retrieved, and reproduced. Bookkeepers, thus, need to be aware of this trend and make sure that every receipt is kept in place, in their books, and on the cloud, readily accessible and retrievable on demand.

Bookkeeping Practices For Truckers

For truckers who spend most of their days on the road, bookkeeping may not be the first thing on their priority list. However, as in other kinds of businesses, trucking companies and owner-operators must pay their utmost attention to getting the business up and running by fulfilling the back-office tasks. Keeping their books organized is just as important as completing the shipping missions because knowing that all receipts, expenses, and purchases have been carefully recorded, truckers can focus on driving with peace of mind. 

To those who are new to the trucking industry, the off-the-road workload of a trucking business may be unexpectedly heavy. Some major duties of a trucking bookkeeper include, but are not limited to, tax management, billing and tracking customers’ payments, maintenance management, and creating trip records. 

Bookkeepers’ responsibilities
  • Keep track of dispatches. We don’t need to emphasize more the significance of having customers pay on time for the carrier’s services! It goes without saying that the business income, as well as profits, depends largely on this, so making sure that all dispatches are billed and paid is the most basic job a bookkeeper must do.
  • Keep track of each trip’s expenses. The world of trucking is on the road, and every trip counts when it comes to managing business costs. Besides your driving license, don’t ever forget to collect all the fuel receipts and keep them in a safe place. 
  • Keep track of taxes such as the IFTA and IRP. One of the first lessons in dealing with trucking finances is taxes. Taxes specific in trucking business include International Fuel Tax Agreement (IFTA) and International Registration Plan (IRP) related fees. Calculating these taxes can be really confusing or even stressful because of the varying rules and regulations applied to each state which fluctuate from year to year. What’s more, failures to submit IFTA and IRP reports and making tax payments also lead to severe fines or penalties that no trucker wants to experience. Here’s where bookkeeping comes to the rescue with all fuel purchase receipts stored and classified neatly, which makes tax management much less time and energy-consuming.
  • Pay the drivers. This entails tracking their driving records, but more than simply paying for their labor other aspects such as insurance and medical care should be included to ensure their health and safety are cared for as well.
  • Pay the maintenance bills. As a truck driver, your truck is your biggest asset. A truck in a good condition keeps your ride safe and is crucial to the life of your trucking business. Just like regular health check-ups make people aware of their well-being and identify health risks at an early stage, regular maintenance can help the driver avoid unnecessary repair costs or purchases if some parts are broken and require replacements due to late repairs.

SaaS, Fintech And The World Technology

Looking back at our lives 10 years ago, we will be surprised at how much our world has developed. We thrive from doing things manually to having things done automatically. We thrive from waiting hours at a place to finishing the transaction just within 1 click. The world has been changing at a flashing pace. Following the world trend in technology, a lot of SaaS and Fintech enterprises have been born and even increased astoundingly during the Covid-19 pandemic. The number of SaaS and Fintech companies is also expected to rise even after the pandemic. 

Since both types of business are leading trends in the market, in this writing, we would like to introduce to you the relationship between SaaS (Software as a Service) and Fintech. 

1. SaaS services

Together with the development of technology, SaaS (Software as a Service) becomes a trend and gradually replaces the existence of traditional SaaP (Software as a Product) due to its convenience, flexibility, fast implementation, and cost-saving benefit. 

SaaS allows businesses to access a particular service remotely through a web browser, using the internet connection. With SaaS, after implementing the application, companies just need to pay a certain amount to “hire” the service from the provider. They do not have to invest in setting up a server and other maintenance tasks afterward. Each amount of fees paid indicates a certain number of functions that can be performed. By this form of service, business owners can adjust which service plans are best suited for them, hence they can cut unnecessary maintenance costs. 

With its certain benefits, SaaS is favored among big companies, as well as start-ups and entrepreneurs. By applying SaaS, companies can spend more time on how to increase their revenue, or how to improve their operating efficiency, instead of focusing on handling, upgrading, and maintaining the system.

Moreover, nowadays, SaaS services are specialized and can be applied to different departments in a company such as HR, Operations, Finance & Accounting, Sales & Marketing, Customer Service, and so on. 

Let’s take the following as an example. Shoeboxed is a SaaS company that specializes in managing receipts for not only individuals but also businesses (both small-size and big-size). All of the data on the receipts are scanned and stored in the system in both picture and data format. Users then can keep track of the payment history by exporting the file later. The receipt managing task can contribute a big help for the Accounting department in tax preparation, as well as the reimbursement procedure. Besides, since all the receipts data are well organized, it is easier for the Operations Team to consider which tasks need cutting off, or it is useful for the Sales and Marketing Team to sit back and examine which marketing strategies are worth investing in.

2. Fintech and its growing trend 

We believe that many of us have heard about the word ‘Fintech’ a lot of times. It even becomes a famous term and topic especially among people in the IT sector. However, according to Statista, 67% of the US population said that they had not heard about Fintech, while 21% have heard the word somewhere, and only 16% have heard and understood clearly the meaning of it. Despite those low numbers, the industry is still growing fast. So what is Fintech and why do people talk about it?

‘Fintech’ is a short form of Financial Technology. Fintech is a recently-created term that describes the new trend in the Financial and Banking area that “employs new technologies to improve or innovate financial service”, according to the World Bank. The word can be applied to all companies that use the internet, cell phones, cloud computing technology, and other open-source software to advance the efficiency of the Banking and Investment business.

Companies of Fintech can be divided into 2 groups:

  • The first group is companies that focus on the end-users. Their main businesses are to provide digital tools that help improve the customer experience in borrowing, money managing, and start-up funding.
  • The second group is companies that play the “back office” roles in supporting other financial institutions.

So, is the e-wallet function on the mobile application of a banking institution called fintech? Unfortunately, the answer is no. It is just called an application of IT in the banking area.

However, for example, if Shoeboxed develops and applies a new data security technology to the e-wallet application of a banking institution, to provide convenience and safety to the customers, yes it is fintech.

Fintech is now providing services in different areas such as banking technology, payment, financial management, cryptocurrency, … with diverse services including

  • Digital wallet (or e-wallet) – “a software-based system that securely stores users’ payment information and passwords for numerous payment methods and websites” (Example: PayPal).
  • Distributed ledger technology on a blockchain platform. A distributed ledger is a database that is distributed to more than one computer or node. Each node maintains a ledger and the ledger will be updated if there are any changes in data. A blockchain is a type of distributed ledger where every node has its copies of the ledger. When data changes happen, all the copies of the ledger will be updated. (Example: Bitcoin).
  • B2C e-commerce – online transactions between businesses and customers. 
  • mPOS – known as mPOS, a portable point of sale of a smartphone or tablet that acts as a register. The service is widely used for businesses such as food trucks, convenience stores, supermarkets, etc. that allows the customers to complete payment transactions just within a touch. 

Besides some examples of Fintech products listed above, there are still a lot of services that might be a bit less popular such as:

  • Peer-to-peer lending (abbreviated as P2P lending) – a website that allows users to borrow and lend money directly. The P2P lending website helps to connect the borrowers directly to investors. In exchange for that, they control the transaction by setting the fee, interest rate, and other terms of conditions. 
  • Crowdfunding – a platform that allows start-ups to sell some of their future products to potential investors. If start-ups can fund enough money, they can start their project right away and vice versa, if the amount of money funded is not enough, start-ups will return them to investors. 
  • Personal finance – a different branch of P2P lending that collaborates with banks to give end-users insights and advice about their bankings. 
  • Data management
  • Insurtech and so on

It is undeniable that Fintech has been encouraging a trend of entrepreneurship in the Financial and Banking, the industries that are famous for their requirement of huge capital when joining the game. Thanks to this trend, there is a wide range of services available in the market, yet going along with the difficulties in management. 

However, if wisely used, Fintech can bring several benefits such as:

  • Improving customer satisfaction since the customers save time when completing a transaction
  • Analyzing customer behavior easier than before with reliable recorded data
  • Saving operating costs for business owners
  • Setting limits on manual inaccuracies

Following the Industrial Evolution 4.0, and now is 5.0, a lot of traditional financial institutions are changing their ways of approaching more customers by collaborating with Fintech companies. According to PwC, 82% of traditional financial institutions plan to increase collaboration with Fintech in 3 – 5 years to avoid losing revenue.

3. Conclusion

With the explanation of SaaS and Fintech mentioned above, can we say Fintech is a type of SaaS? Or should Fintech be positioned as SaaS? Well, IT DEPENDS. We say “it depends” because both have a lot of similarities in the purposes, the ecosystems, the applications, and so on. Therefore, it depends on the ultimate goals of the companies and how they operate their business.

As you can see that Fintech companies provide a wide range of services but mainly in the Finance area, while SaaS services are broadly provided in different areas. Though, since there are so many services available nowadays, and surely will increase in the future, that may confuse the users of what to choose, SaaS, Fintech, and other traditional business platforms can consider collaborating to introduce better and compact services. Despite their similarities yet differences, they are offering great values not only to the world economy but also to the development of technology.