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! 

Your Ultimate Guide to Travel Expenses

Keeping track of travel expenses and deductions can be so confusing that you may find yourself tempted to throw in the proverbial tax towel and forget the whole thing. Before it gets to that point, use our comprehensive guide to travel expenses to learn what to deduct, what to write-off and more.

What to deduct when you’re on the go (and how to keep track of it all)

Keeping track of travel expenses and deductions can be so confusing that you may find yourself tempted to throw in the proverbial tax towel and forget the whole thing.

But for small business owners, the write-offs you take while traveling can make the difference between owing money and getting a refund at the end of the year.

Our Ultimate Guide to Travel Expenses will teach you:

  • What counts as a deduction and what doesn’t

  • The portion of each expense that can be deducted (Newsflash: it’s not always 100%!)

  • How to keep track of it all and still enjoy your trip

Can I write this off?

US INCOME TAX FORMSExpenses vs. deductions

If you are going to create an expense report, submit it to your boss or partner, and be reimbursed for that expense on your next paycheck, the expense is not a deduction. It may very well end up being a deduction for the company come tax time, but since you’re not truly paying anything out of pocket, you can’t claim it as a write-off.

If, however, you are a small business owner and are paying out of pocket travel expenses for your hotel room, rental car and airfare, those expenses definitely qualify as deductions.

Local vs. out of town travel

Knowing the difference between local travel and out of town travel will help you determine how to calculate your travel expenses and write-offs.

The IRS considers travel expenses to be completely separate from the day-to-day costs incurred while running your business.

The van you bought for deliveries, the mileage accrued making said deliveries, parking fees and tolls are all considered transportation costs, even if you have to travel hundreds of miles on any given day.

So how does the IRS determine whether a write off is a transportation deduction or a travel deduction?

Easy. They want to know if you’re spending the night.

Out of town travel means that you’re far enough from home that an overnight stay in a hotel is a necessary business expense (and no, shacking up at your hometown’s nearest 5-star resort just because you feel like it does not count as a travel write-off).

Once that airfare is booked and a few nights at the Best Western San Diego seem imminent, you can begin tracking your expenses as travel deductions. The Shoeboxed Receipt and Mileage Tracker makes it easy to track receipts to write-off or deduct later, and it even allows you to track your mileage!

Business vs. personal

If you’re off to a conference or event in a snazzy city like Paris or Puerto Vallarta, you may be inclined to bring your significant other, spouse or family along for the ride.

Generally speaking, unless your posse is also employed by your company, none of their travel expenses will be deductible.

Let’s say you’re going to Paris for a four-day conference and you’re bringing your husband. The plan is to attend the conference for the first four days, then gallivant around Western Europe for another 10 days.

  • Your airfare is deductible, but his is not.

  • Your hotel room is deductible, but only while you are attending the conference. The remaining 10 days are considered a personal vacation and you’re on your own.

  • 50% of the cost of your meals and entertainment is deductible, but only during the conference. If you and your husband go to dinner during the business portion of your trip, half of your meal (or 25% of the bill) can be taken as a deduction. The same rules apply if you bring additional family or children.

While your hearts may be joined, your travel expenses are not. Track your deductions exactly as you would if you were traveling alone, and make sure to keep personal vacation expenses completely separate from business expenses.

Can I write all of this off?

Just because something is a write-off doesn’t mean it’s 100% deductible. Confusing?

Think of the IRS like an airline who’s forced to put you up for the night when your flight is delayed. Sure, they’ll offer you a decent hotel room and transportation to and from the airport. But what’s up with that $15 food voucher? What are you supposed to buy with that, a Snickers bar and a bottle of water?

The IRS wants you to be well-rested, but they don’t really feel like footing the entire bill for dinner at a 5-star restaurant.

In general, you may be able to deduct up to 100% of the following business expenses while traveling:

Airfare

The cost of your airfare is up to 100% tax deductible. If you decide to take a train or a bus, that counts too. Uncle Sam will even pay for those pesky baggage fees, but see below before trying to write off those pre-flight cocktails.

Yes, you can fly first class, but be ready to prove that doing so is “regular and necessary” for your business. Extremely lavish expenses tend to raise red flags.

Internet access

If you fall victim to one of the many airports or hotels that still doesn’t offer free WiFi, fret not. That 24-hour Boingo Internet pass is a deductible travel expense, as is anything you spend in the hotel business center. If you find yourself racking up printing, faxing and copying costs while traveling, those are also 100% deductible.

Transportation costs

Once you arrive in Phoenix (or Vegas, or Tahoe), you’ll probably have to leave the airport. Your rental car, cab fare and/or public transportation costs are all 100% deductible. The same goes for any extra expenses you accrue while driving the rental car like gas and tolls.

Make sure to ask for a receipt when taking a cab!

Go ahead, give him a big fat tip.
Go ahead, give him a big tip.

Hotel room

In most cases, the cost of your accommodations are 100% deductible. If it makes sense, you can certainly choose a 4 or 5-star hotel if you don’t mind fronting the initial extra cost. Just make sure your choice falls within the realm of “regular and necessary” – the IRS doesn’t accept deductions that it deems “lavish or extravagant.”

Since one person’s “lavish” is another person’s “meh,” you have some wiggle room here. If the 5-star hotel is 30 miles from your work site and you’re not only staying there, but taking a personal helicopter to and from your digs, and you’re not Bill Gates, you might want to tone it down a notch.

Hotel expenses

You tip the bell hop, you tip the valet driver, you pick up your dry cleaning and before you know it, your hotel expenses are starting to creep up towards the total cost of the room itself.

Happily, anything that costs you money while you’re in the hotel is deductible, as long as it’s regular and necessary for a typical person in your line of work.

Tip: Since it might be a little awkward to ask the bell hop for a receipt after tipping him, just make a clear note of how much you spent on the top of a related receipt from the same day.

Meals and entertainment

50% alert! 50% alert!

When calculating travel expenses from meals and entertainment, you have moved away from 100% Write-Off World, and into the Land of Half Off.

A whole lotta eating goes on while you’re traveling, and Uncle Sam understands that it’s not particularly practical to live on microwavable pizza pockets from the hotel vending machine for a week.

You can deduct up to 50% of your meals while traveling, whether you eat alone or with business associates. Be careful when calculating dinner write-offs, however. If you happen to be staying in the home town of your old college buddy, dinner with him or her is not a deduction.

Other forms of entertainment are only deductible if you can demonstrate how they are necessary for the growth of your business. Jot down the names of potential clients and business associates on the back of your receipts before scanning them to your Shoeboxed account.

If you want to write off your tickets to Wicked, go ahead – as long as you actually work in the entertainment industry, that is.

Keeping track of it all

Phew! With all of those travel expenses to keep track of, you may want to simply throw in the towel and take the standard deduction for meals and other travel write offs.

But wait! Being your own mobile bookkeeper while traveling is a breeze thanks to receipt scanning apps and portable receipt scanners.

Shoeboxed Receipt and Mileage Tracker

Our handy app (available for iOS and Android) lets you keep track of every travel expense in the blink of an eye. Just snap a picture of each receipt and let us do the rest! Shoeboxed uploads each receipt to your account, digitizes the data for editing, and lets you recycle that paper scrap before it can begin collecting dust in your carry on.

Fujitsu ScanSnap

What if you acquire an exorbitant amount of receipts while traveling, or you have a ton of paper that needs to be digitized while you’re on the go?

The Fujitsu ScanSnap scans stacks of paper receipts and large documents in a snap! With its USB port and ability to create editable Word and Excel files, your long distance work site will feel like a home office offshoot. At just 12 ounces and 34 inches long, you’ll be able to slide the ScanSnap into your carry on and focus on what really matters – finishing that final Words with Friends move before the flight attendant makes you turn off your phone.

Now that you’re a travel expense expert, get out there are start tracking those write-offs already!

References:

1.  http://www.irs.gov/publications/p463/ch04.html

2. http://www.irs.gov/taxtopics/tc511.html

photo credits: businesstravelalmanac.com, www.blogto.com

How to Be Your Own Mobile Bookkeeper

Being your own mobile bookkeeper means keeping track of your small business’s finances while you’re on the go. Tracking expenses while traveling, going to meetings and running errands prevents the buildup of paper clutter and allows everyone connected with your business to stay updated on the financial snapshots relevant to them.

Mobile bookkeeping is a cinch thanks to smartphone apps that allow you to track expenses while traveling, between meetings, or from anywhere with an Internet connection. Heck, we’ve even had Shoeboxed customers beaming receipts to their accounts from the middle of the ocean!

Here are 4 easy ways to become your own mobile bookkeeper. Continue reading “How to Be Your Own Mobile Bookkeeper”