From years of working at TruckingInfo.com, I know Trucking is a unique business. In addition to undertaking the day-to-day tasks of being out on the road, you also have back office duties. Unless you studied finance in a previous life, bookkeeping could seem confusing but it’s so important for the health of your business, so I’m glad you’re here.
Here are the best tips and tricks to manage bookkeeping for a transportation business (be sure to pay attention to tip #4). We’ll also take a look at the best software that can help you or your bookkeeping service manage your finances.
Tip 1: Stay up to Date
Bookkeeping is a lot easier if you stay up to date with your records. Try and maintain your books at the end of every day – or at least once per week.
The most important reason to keep up to date is so that you have a clear picture of your current financial situation. Knowing where you stand will help you make better short and long term business decisions. Organized and accurate financial records give you the visibility you need to run and grow your business.
If you don’t keep up to date, a backlog will quickly build up and you have a lot of work when you finally get around to it. Pushing off the task also increases the likelihood that you will forget what payments were for. This can cause categorization errors that will make you miss out on deductions.
Tip 2: Keep Notes
Always keep notes of what specific payments were for, especially if they are not being recorded immediately. Use a smartphone to keep records or even just keep a notepad and pen handy, if you prefer.
It is easy to think that you will remember the details of payments, but it can also be very easy to forget. We often pay or receive payments when we also have our mind on something else, making it very easy for us to forget exactly what the payment was for.
This is also important because it will help you to keep track of who needs to pay, making it easier for you to chase down your invoices. It will also make your bookkeeping a lot less time-consuming.
Tip 3: Use a Business Credit Card
Using a business credit card can help make your bookkeeping a lot easier. Most accounting systems can interface directly with your bank and credit card accounts.
This means you won’t have to enter the information yourself because it is done automatically for you whenever a payment is made. This can save you a lot of time in having to enter the information manually. It also helps to eliminate errors caused by accidentally typing in the wrong information.
It is also very important to get a separate credit card for business as opposed to using your personal card. This is because you need to keep the two separate to get an accurate picture of your company’s accounts.
Tip 4: Know Your Cost-per-Mile
One of the most important things when it comes to trucking bookkeeping is having access to metrics that give you key information about how your business is performing financially. The most important metric of all for trucking companies is average cost-per-mile.
To work out your cost-per-mile you will first need to calculate the approximate number of miles driven in any one month. Then, divide your fixed costs and your variable costs by this number so you get an average cost per mile for each category. Add them together and you have your total cost per mile of doing business. MotorCarrierHQ.com has a comprehensive calculator to help you determine your cost-per-mile.
Total cost-per-mile information can be extremely useful for decision making. For one thing, it helps you price your services in a way that makes you profitable. It can also help you to identify high-cost areas where you may be able to cut back on. For example, if the cost-per-mile on your fixed overheads is high, it might mean you need to reduce your operational costs.
Tip 5: Reduce Your DSO (Days Sales Outstanding)
Cash flow is important for any business. It doesn’t matter how much cash you might have in the pipeline – you will still find it difficult to operate if you don’t have it now.
DSO is a measure of how long it takes for a sale to be converted into cash. To calculate your DSO, first calculate your average sales per day. To do this, take your total annual sales and divide it by 360 days. Then, take your accounts receivable (what you are owed from customers) and divide it by the average sales per day.
DSO is an important metric because lowering your DSO means more money in the bank. It can also indicate a potential issue that needs fixing. One example is low customer satisfaction which can make clients reluctant to make payments for your services, causing delays in payment.
You should also differentiate between external DSO and internal DSO. External DSO means the time it takes from your customers receiving the invoice to when it is paid. Internal DSO means the time it takes for the invoice to be sent after the shipment was completed. Streamlining processes to send invoices sooner can help improve your cash position.
If cash flow is an issue, invoice factoring is probably worth looking into. There are many invoice factoring services that specialize in trucking and transportation. These services will pay you an advance, often up to 95% or more, of the value of your outstanding invoices so you can get the cash you need to pay expenses. There’s an additional benefit that they also take on the role of accounts receivable so you don’t need to spend time reminding customers to pay their invoices.
Tip 6: Use TMS Software
The right accounting software will help you to maintain your books and run your business. The best solution for a trucking company is to use a TMS (Transportation Management System). This is software that has been designed specifically to manage a transport business.
TMS systems have integrated accounting software and that help you manage your business operations. This will simplify your bookkeeping by automating normally lengthy and complicated tasks.
TMS software also has additional features, like reports that give a clear picture of the metrics you need to efficiently operate your business. These metrics include, but are not limited to:
- Total Revenue
- Total Expenditure
- Profit/loss
- Cost per mile
- DSO
- Accounts Receivable
- Accounts Payable
- Revenue Yield
- Maintenance costs
- Freight cost per unit
- Total and average salaries
- Debt ratios
Best Trucking Bookkeeping Software
Here we take a look at the best bookkeeping software, which tends to be rolling into TMS software. A transportation management system will help you manage the bookkeeping for your trucking operation as well as providing many other useful features.
1. Truckn Pro
Truckn Pro by Fog Line software is a platform that is best suited to owner operators or companies with a small fleet. The software is designed to run on Windows 10 and it will allow 2 users on separate computers.
Truckn Pro Cost
Truckn Pro is available for a one-time payment; there are no monthly fees or other costs associated.
It is available in 3 different packages, the most affordable of which is the Basic Edition which costs just $79. This package offers basic features which include the ability to track revenue and expenses.
Next is the Owner Operator package, which costs $149 and includes more advanced options like invoicing.
There is also the Small Fleet Owner edition, which costs $219 and has more features including payroll. Fog Line software also offers a free document management program.
Fog Line Software also offers a Free Starter Edition of Truckn Pro. The free edition is designed with basic features to help you track profit and loss and can function as a simple bookkeeping system.
Truckn Pro Summary
Truckn Pro is an affordable platform that offers some basic TMS tools along with useful bookkeeping software. Included in the single up-front fee, users have accessibility to ongoing support and upgrades to the platform.
2. ProTransport
ProTransport is a TMS platform that offers a wide range of features for trucking companies. The platform has features that include dispatch, and safety and maintenance tools in addition to bookkeeping tools.
ProTransport Cost
ProTransport costs $175 per month regardless the size of your fleet. This price includes access to the features mentioned above and unlimited document storage.
ProTransport Summary
ProTransport is a platform that is suitable for trucking companies of all sizes. In terms of trucking bookkeeping, the platform offers services like invoice creation, accounts receivable, accounts payable, profit and loss, and productivity.
Overall, however, ProTransport is a platform that can be beneficial to trucking companies in numerous ways. It is packed full of features and has been designed specifically with trucking companies in mind.
3. Q7 TMS Software
Q7 from Frontline Software Technology is a fully integrated platform that has everything a trucking company could need. From dispatch operations to fleet management tools, the day to day operations become easier to manage. The platform also comes with a fully integrated platform that helps you keep track of payments, accounting, and payroll.
Q7 features include:
- Order Management
- Fuel and Mileage Tracking
- Truckload, Brokerage, and LTL Dispatch
- Freight Billing
- Pay Settlement
- Fleet Maintenance
- Safety
- Accounting
- Payroll
Q7 Cost
The cost of using the platform is not provided and you will need to contact their sales department for more information on price. There is no free trial, but you can request a free demo that will be tailored specifically to your company.
Q7 Summary
Overall, Q7 is a platform that offers pretty much everything you can need. Its vast array of features can make it difficult to learn, but training and tech support are available to help get users up to speed.
Frontline offers Q7 either as a cloud-based subscription or as a site license, also called on-premises, which is great because you don’t need to worry about internet outages keeping you from accessing the software.
4. LoadMaster
LoadMaster by McLeod software is a web-based platform that offers a selection of useful trucking management features such as dispatch management, fuel management, and GPS tracking. The platform can be tailored to suit each business’s needs and it also offers a selection of trucking bookkeeping tools. These include, but are not limited to, fuel tax reporting, freight billing, and payroll.
LoadMaster Cost
McLeod software provides no details of payments on their website. You will need to contact the sales team for pricing information.
LoadMaster Summary
LoadMaster is packed full of features that could help make things a lot easier for a trucking company. However, customer reviews have raised concerns over ease of use, the interface, and overall performance. There have also been complaints about customer service, and value for money has also been called into question. For somebody that is looking for a platform that is oozing with features, however, loadmaster could be just what you need.
5. TruckingOffice
TruckingOffice is a web-based platform that helps trucking companies to manage the operations side of their company, as well as the business side of things. It offers features that include monitoring drivers, and trucks, maintenance, dispatch, and routing. Bookkeeping features include cash flow and accounting features that help make trucking bookkeeping a lot easier for you.
TruckingOffice Cost
TruckingOffice is available in numerous packages. The Basic plan offers a selection of FTL features starting at $20/month for operation with just 1-2 trucks.
The Pro plan offers a selection of FTL and LTL features starting at $20/month for operations with just 1-2 trucks.
A routing mileage add-on on is also available if needed, and more trucks can be covered on each plan for a higher fee.
TruckingOffice Summary
TruckingOffice is a very useful platform for trucking companies, helping them to manage many aspects of their business. However, while the platform does have some trucking bookkeeping features, it may not have all you need if you are looking for a bookkeeping platform over a TMS.
6. Axon Trucking Accounting
Axon Trucking Accounting Software offers tools that help with operations like transportation management, dispatch, and fleet management. It also offers advanced trucking bookkeeping features that provide comprehensive control over your finances.
Axon Cost
Axon provides no pricing information on their website and you will need to contact the sales department for more information. They do not currently offer a free trial, but they do offer a free demo tailored to your company.
Axon Summary
While the Axon platform does offer TMS features, its real strength lies in its trucking bookkeeping features. One of the key advantages of this system is that data only needs to be entered once, even when the information is being used for different metrics. This is because the system is fully integrated and every component of the platform works with everything else. Other accounting features also help to make it one of the best TMS’s available when it comes to trucking bookkeeping.
7. RigBooks
RigBooks is designed to help trucking companies to be as profitable as possible. It’s trucking bookkeeping software helps to break down finances that help you see which parts of your business are profitable, and which are not.
For example, it is able to give you information on the profitability or otherwise of specific trucking jobs. It also helps you to see how much it costs to run your truck per mile. The software is designed to be easy to use, and to make it less time consuming for trucking companies to manage their books.
RigBooks Cost
Packages start at just $19/month. Other plans are available but you will need to speak with their sales department for further information. A 30-day free trial is also available.
RigBooks Summary
RigBooks is a platform that does have some tools that help with managing trucking operations. However, the platform’s strength really lies in its accounting features.
Final Thoughts on Trucking Bookkeeping
Which trucking bookkeeping software works best for you will depend on several factors. These include the number of trucks in your fleet, how tech-savvy you are and, of course, the cost.
For smaller businesses, it is best to go for the basic platforms or at least use QuickBooks Online. Although not packed with features, they can still help stay organized and manage expenses. For those with a larger fleet to manage, a TMS that gives you more control over the management of your operations will be the best option.
