Given the number of times trucking companies receive or make payments, they often have fairly complex accounting needs. Even among single-rig operations, accounting for trucking companies presents some challenges. It is a good idea to be aware of these four common accounting issues within the trucking business.
Segregation of Accounts
Everyone who runs a business should segregate their personal and company accounts. This applies even to owner-operators. Accounting for trucking companies should always be separate from personal money to ensure you're handling your numbers and taxes properly.
You can always set your business up as an LLC and pass your earnings through for legal purposes. This will make it easier to track your earnings without getting into complex legal or accounting problems regarding your pay. It also will reduce your liability exposure if someone sues the business or the company goes bankrupt.
Particularly in an industry where payments may lag expenses, it's a good idea to use accrual rather than cash accounting. Cash accounting is when expenses and profits go on the books only upon payment. In an accrual system, the profits and expenses go on the books at the time of the agreement. This prevents weird scenarios where a big expense might go on the books in December, but the payment doesn't go on the books until January. Such transactions in a cash accounting system can leave you with higher tax bills one year while depriving you of the ability to expense things in another.
Keeping a rig on the road isn't cheap, and you should track all costs and potential deductions. This will lower your tax bills while also giving you a clearer picture of the actual state of your trucking company. Many firms use gas cards and other automated payment systems to ensure that drivers track their expenses without filing additional paperwork. Just make sure you can integrate gas card payments with your accounting software to simplify everything.
Also, be careful about tracking expenses. Meals, hotels, washes, tolls, parking, and replacement parts should be on the books. If you so much as replace a fuse in the cab to keep an overhead light on, expense it.
Taxes and Fees
Many trucking firms have to deal with taxes and fees that other drivers do not. Incurring penalties are bad for the bottom line, so try to track and pay these as promptly as possible. These are often monthly or quarterly payments, so know when the dates are and how to make the payments.Share