Every owner-operator needs a basic understanding of bookkeeping. Does that sound intimidating? It doesn’t have to be.

 

Do Owner-Operators Need a Bookkeeper or an Accountant?

Some truckers use bookkeepers to record transactions, organize financial records, reconcile accounts, and manage invoices. Because tax laws can be complicated, many owner-operators use a qualified tax professional to prepare or review their returns.

Bookkeepers and accountants are not the same thing. Bookkeepers generally record and organize transactions. They might take a trip envelope and enter the income and expenses into a bookkeeping or business-management system. An accountant interprets financial information and may provide tax or business advice.

Does an Owner-Operator Need Professional Help?

Not every owner-operator needs to hire a bookkeeper. However, many benefit from using a qualified tax professional, especially when the business has employees, multiple trucks, or a more complicated business structure.

Professional help can be valuable, but it can also be expensive. Trucking software can handle many routine recordkeeping and invoicing tasks, while a qualified professional can help with tax preparation and complicated accounting questions.

What if your trucking software could reuse information from your dispatches, invoices, and expense records instead of making you enter it repeatedly?

1. Choose a Bookkeeping Method

Most small businesses use either cash or accrual accounting.

With the cash method, you generally record income when you receive the money and expenses when you pay them. If a customer pays a December invoice in January, the income is recorded in January.

Under the accrual method, you generally record income when you earn it and expenses when you incur them. That December invoice would generally be recorded as December income, even if the customer pays it in January.

Whichever method you use, apply it consistently. Ask a qualified tax professional which method is appropriate for your business.

2. Record Your Income and Expenses Regularly

Regular entries give you a more accurate picture of where your money comes from and where it goes.  Once you’ve set up your system, entering your daily expenses should only take a few minutes a day.  Enter invoice payments promptly so your records show which invoices have been paid and which remain outstanding.

3. Save Your Receipts

Auditors and investigators and IRS agents – oh my! – may expect to see proof of your expenses. The IRS does not require one specific recordkeeping system, but your records must clearly show your income and expenses and support the deductions claimed on your tax return. Digital receipts and clear photographs are generally acceptable when they are complete, readable, and available when requested.

4. Track Invoices Until You Get Paid

A weekly review of your unpaid invoices will keep past-due balances from getting away from you.  When you offer Net 30 payment terms, it’s too easy to forget a load a month later.  A complete trucking management system (TMS) can create invoices, track their due dates, and identify past-due balances. Mobile access also lets an owner-operator send an invoice without waiting to return home.

5. Reconcile Your Accounts Monthly

Compare your bank, fuel cards, and credit card transactions with your bookkeeping records. Look for missing expenses, duplicate entries, incorrect amounts, and payments that have not cleared.

6. Use Your Reports to Plan Ahead

Review your reports every month. Follow up on overdue invoices, watch for rising expenses, and set money aside in a separate business savings account for taxes, insurance, truck payments, and repairs. A major roadside repair can cost tens of thousands of dollars. Planning ahead can keep an expected expense from creating a cash shortage or ending up on a credit card. 

What Can Trucking Management Software Handle?

Trucking management software can handle many of the routine recordkeeping and invoicing tasks that might otherwise be done manually or assigned to someone in the office. 

For taxes, professional help is often worth considering. Some owner-operators prepare their own returns with tax software. However, a business with employees, multiple trucks, multiple owners, or a complicated business structure may benefit from a qualified tax professional. The business-related portion of bookkeeping and tax-preparation fees may be deductible, and professional help can reduce errors and identify deductions the owner might overlook.

For load management and invoicing, a TMS can manage dispatch information, create invoice packets, send invoices, and track outstanding balances. Those tools may reduce the amount of routine invoicing and record entry assigned to a bookkeeper. 

Frequently Asked Questions About Bookkeeping for Truck Drivers

How often should an owner-operator update the books?

Enter income, expenses, and invoice payments daily. Don’t wait for a weekly excavation of your passenger seat. Using an easy upload system like TruckingOffice PRO’s fuel card import feature or receipt uploads makes the task fast. Review unpaid invoices weekly, and reconcile your bank, fuel card, and credit card accounts every month. Regular updates make missing transactions and overdue invoices easier to find.

Does an owner-operator need a bookkeeper or accountant?

Not every owner-operator needs a bookkeeper. Trucking software can handle many routine recordkeeping and invoicing tasks. However, a qualified tax professional can help prepare returns, answer tax questions, and handle the more complicated needs of a business with employees, multiple trucks, or multiple owners.

Can trucking management software replace accounting software?

Trucking management software and accounting software perform different jobs. A TMS can connect dispatches, invoices, payments, expenses, documents, mileage, and trucking reports. Complete accounting software maintains the company’s general ledger, including its assets, liabilities, and equity. Some trucking businesses may benefit from using both.

Spend Less Time Reentering the Same Information

Bookkeeping still requires your attention, but it shouldn’t require entering the same load information again and again. TruckingOffice PRO connects your dispatches, invoices, payments, expenses, documents, and trucking reports in one system. Keep better records, find unpaid invoices, and give your tax professional organized information without spending your weekend sorting trip envelopes.

Start your free 30-day TruckingOffice PRO trial today.