If you drive a truck for a living, bookkeeping and taxes are probably the last thing you want to think about on a regular basis. But not creating a good record-keeping system will cost you a lot of money that you could be using to enhance your business or make your own life more comfortable. Here are a few ways to improve your books with minimal effort.
Filing Receipts and Expenses
Keeping good track of your receipts and various expenditures doesn't have to mean spending large chunks of time hunched over a computer or separating receipts you can barely remember getting. Since truckers are constantly on-the-go, start with a simple expanding pocket folder - available at any office supply store - kept beside you in the truck. Label the pockets by the categories of expenses deductible on your taxes. You may go over these categories with your bookkeeper or accountant, or you may base them on the categories used in the Schedule C (Profit or Loss from Business) that you will be filing in the spring.
As you have expenses, put them in one of the pockets and forget about them. At the end of the month, add up that month's receipts and enter the total either into a notebook with the same categories or into a basic spreadsheet. Put the receipts in a yearly expandable folder elsewhere to keep your truck clean and neat. With an empty expandable folder at your side, begin your new month.
Figure Out Your Profit Margin
Many small businesses fail to accurately account for whether they are really turning a profit. But calculating your cost per unit of goods, per hour of services, or per mile of hauling is essential if you want to determine how to keep your business on the road and be able to buy new equipment in the future.
For a basic understanding of your profit margin as a trucker, the simplest method is to write your odometer reading in a log book (also available at any office supply store) on the first or last day of each month. Do it when you're preparing your receipts to total in your notebook or spreadsheet. Once you know your miles driven for the month, you can see how much each category is costing you per mile. Simply divide the category total by the number of miles driven for the cost per mile.
What's the value in setting aside a few hours to do these tasks? You can now see which categories of expense cost you the most money per mile and where you might concentrate your efforts to cut costs. Rather than wasting effort and money on things that won't add much to your bottom line, you can better gauge where to focus your attention in order to gain the most. And you will now have easy, accurate records to provide your tax preparer or accountant each year, ensuring that you leave no money on the table when it come to tax season. For more tips and information about preparing your taxes, contact a company like Danta Chase & Co CPAs PS.
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