Running a trucking company requires that you handle the financial side of things correctly to remain profitable and compliant. This can be a challenge in the ever-changing business landscape, with unique accounting needs that other businesses may not experience.
Here are three specific accounting needs trucking companies may face.
Logging and Tracking Miles
Tracking the miles driven by each driver is an important part of trucking company business operations. Miles driven and the destinations visited are important for fuel tax reporting, tracking employee performance, and maintaining records of business-related trips.
For example, most states require trucking companies to report the miles driven in each state and by each driver for fuel tax purposes. Fuel taxes refer to the taxes levied by each state on fuel purchased in that state. A well-equipped accounting system will be able to track every mile driven, destination visited, and fuel purchased.
Fuel Cost Tracking
Fuel costs are typically one of the largest operational expenses for trucking companies, so it's important to track fuel use and costs. These costs can be tracked by driver or truck, allowing you to see which drivers and trucks are using the most fuel.
This information can then be used to make adjustments to reduce fuel costs, such as changing routes or taking measures to increase fuel efficiency. But the process often requires a thorough accounting process to ensure proper fuel management from purchase to use. Your accountant should offer a comprehensive view of fuel costs and usage to help you make the most cost-effective decisions.
Cash Flow Management
The nature of trucking businesses means that there can be large gaps in cash flow due to long periods between invoicing and payment. Many clients will pay for a shipment once the goods have been delivered rather than upfront.
To help manage this situation and ensure that your trucking business has the cash it needs to meet its obligations, your accountant should be able to help you create and follow a cash flow management plan. This plan should include budgeting, forecasting, invoicing and collections practices, and debt management.
Trucking companies need to manage their cash flows so they can remain financially solvent during these times. Otherwise, the company may struggle to pay its employees or other creditors.
These unique accounting needs for trucking companies demonstrate the importance of having a thorough understanding of all business operations. With careful tracking and compliance with changing regulations, trucking companies can ensure long-term profitability and business success.
Using an experienced accountant to handle these unique financial needs can help keep your business running smoothly for a long time to come. Ask a professional near you to learn more about accounting for trucking companies.