Trucking is a busy venture for more than your drivers. Your office staff has loads to schedule, routes to plan, permits and licenses to secure, and bills to keep up with. When you add invoicing, collections, and bookkeeping to the process, it gets overwhelming. Everything you can do to streamline bookkeeping is essential.
Explore the different strategies you can use to make bookkeeping duties easier to manage. From things your office staff can do to the software that eases those responsibilities, we have plenty of tips to share.
The Value of a Streamlined Bookkeeping System
Having accurate financial records is essential when you’re operating a trucking company. It’s a matter of regulatory compliance. If you don’t have access to accurate reports and financial paperwork, it’s a violation of IFTA reporting requirements. You also need this information for taxes, payroll, and business licenses.
It’s also essential as you need to have accurate records when paying quarterly taxes and year-end taxes. You also need your financial information for quarterly reports for any shareholders. It’s also necessary if you plan to take out loans or other financial products.
Knowing your financial standing also helps you make financial decisions. You have real-time information to use for guidance when looking at wage increases for your drivers, quotes on insurance products, and the prices to charge your clients.
People make mistakes. Switching around even two numbers can throw reports way off, and lead to errors with your financial reports, which puts you at risk of failing to comply with different regulations. If paperwork is misplaced, it makes it impossible to prove you did or didn’t do something. That’s why a streamlined bookkeeping system.
Creating a Framework for Your Workers to Rely On
While a streamlined bookkeeping system is essential, you need to have a blueprint on how to make that happen. If your workers don’t have the framework in place, it’s not going to be easy to keep up.
Start by having a breakdown of all of the accounts you hold. Break them down by income and expenses. Work your drivers are doing is income, so that’s going to cover all of the brokers and shippers you’re working with. Expenses are the bills you pay each month, the licenses and permits you must keep current, and insurance policies.
You should have this built out in a structure that can’t be erased. This might be a laminated sheet that’s posted on the wall and a secure file that’s set to view-only and has editing permissions restricted.
Once you have the framework in place, have policies set up on how workers handle the different aspects of bookkeeping. How do they process bills of lading to generate invoices from them? Do they fax, mail, or email invoices? How do you ensure the invoices are received and not lost in the mail or cyberspace? When are invoices due?
When are the bills you pay due, and what processes are used to ensure payments are sent on time? These guidelines ensure everyone involved understands the process flow when it comes to billing and paying bills.
Ideally, you want to reconcile your accounts and bills/statements to ensure they match. The money that you’re seeing taken from your checking or savings account should match the bills you’ve paid. You also need to have a framework in place to verify that the money you’re paid matches the invoice. If there are discrepancies, you need to clarify why there’s a difference.
Once bills are paid, the money is received, and the paperwork matches, you need to have a safe way to store it. Federal privacy laws require you to keep your employees’ and clients’ personal information safe. Store only what is necessary and make sure it’s protected from potential theft.
Optimizing Your Bookkeeping System
You have a framework for your staff to follow. Now, it’s time to optimize their work responsibilities by following these steps.
- Batch Processing: Process all bills of lading in batches at the same time of the day or week. Choose a specific time of the day or week when one or more of your employees drops everything to complete this task. During those hours, don’t let others interrupt them.
- Cloud Storage Solutions: Pay a subscription or fee for enough cloud-based storage where all financial documents are stored. Keep a paper backup in a fireproof safe just in case.
- Mobile Apps: Look for a mobile app that you can pair with your office software to eliminate as much data entry as possible.
- Schedule a Collections Day: Just like you do on batch processing, select a day each week or month when staff members chase down late payments. They can issue late notices, send emails, and make calls. Make sure any collections department is following Fair Debt Collection Practices Act regulations.
Partnering With a Freight Factoring Company
Partner with a freight factoring company to eliminate a lot of the hassle that your office workers go through. With freight factoring, the factor takes the completed bills of lading and generates invoices for you. You get immediate payment, minus any factoring and bank fees, and the factoring company takes over chasing down payment.
Freight factoring is a beneficial partnership when it comes to getting paid quickly and avoiding some of the harder bookkeeping tasks like invoicing and collections. But, there are things to consider.
First, you want to weigh the benefits and risks of a recourse arrangement over a non-recourse arrangement. Recourse arrangements have lower fees, but if your client never pays, you have to repay the money you received from the factoring company. Non-recourse offers protection against your client’s sudden closure or bankruptcy.
Second, you have to look at the fees and ensure you understand them. You’re getting the money you’re owed the same day or within a couple of business days. It’s not a free service. You need to look at the freight factoring fee and explore any other fees. Ask questions if you’re uncertain about what the fees are.
Third, make sure the arrangement is flexible. If you have clients who always pay on time, you may not feel it’s important to factor those invoices. Some companies would require you to, but a flexible arrangement ensures you can pick and choose.
Gaining the Benefits of Technology
Accounting software that’s specific to the trucking industry is one way to streamline your bookkeeping measures. Trucking industry accounting software offers time-saving solutions like:
- Automated Expense Tracking
- IFTA Reporting Tools
- Integrated Dispatch Systems
- Payroll
- Federal and State Tax Processing and Filling
With Saint John Capital’s API services, you simplify the bookkeeping work your office staff has to complete each day or week. It’s incredibly easy to upload invoices from the app to your trucking industry accounting software, which saves a lot of time and effort.
Talk to us about your trucking company’s structure and needs. Our freight factoring options are customized to ensure they’re keeping your cash flow strong and to streamline your accounting practices.
