4 Expense Tracking Tools For A Trucking Company

As an owner-operator in the trucking industry, understanding and managing your expenses is crucial for maintaining a profitable business. Let’s explore the key expenses you’ll encounter and dive deep into effective methods for tracking them.

Essential Owner-Operator Expenses

1. Fuel Costs: Typically consuming 20-30% of monthly income, fuel is often the largest variable expense for truckers.
2. Truck Payments/Leases: These can account for 10-15% of monthly income, varying based on whether you’re financing a new truck or maintaining an older model.
3. Insurance: Costing 5-10% of monthly income, comprehensive insurance is vital for protecting your business assets and operations.
4. Maintenance and Repairs: Allocate 5-10% of monthly income to keep your truck in optimal condition and prevent costly breakdowns.
5. Permits and Licensing: These annual costs usually amount to 2-4% of yearly income, varying by state and load types.
6. Taxes: Set aside 20-30% of yearly income for various taxes, including federal, state, and self-employment taxes.
7. Office/Administrative Costs: Expect to spend 3-5% of monthly income on software, communication tools, and accounting services.
8. Marketing/Load Board Fees: Allocate 1-3% of monthly income for finding loads and growing your business.

How do I keep track of my trucking business? In-Depth Look at 4 Expense Tracking Tools For A Trucking Company

1. Shoebox Method

The shoebox method is the most basic form of expense tracking, involving the physical collection of receipts and invoices in a container, traditionally a shoebox.

Pros:

• Simple and requires no technical skills
• No additional costs involved
• Tangible record of all transactions

Cons:

• Time-consuming to sort and organize
• Prone to lost or damaged receipts
• Difficult to analyze spending patterns
• Challenging for tax preparation

Best for: Owner-operators just starting out or those with very few monthly transactions.

Implementation tips:

• Use separate boxes for different expense categories
• Regularly (weekly or monthly) sort and organize receipts
• Take photos of receipts as a backup

2. Notebook Method

This method involves manually recording expenses in a physical notebook or ledger.

Pros:

• More organized than the shoebox method
• Allows for immediate categorization of expenses
• Portable and always accessible

Cons:

• Time-consuming to maintain
• Prone to human error in recording
• Limited analysis capabilities
• Difficult to create reports or summaries

Best for: Owner-operators who prefer handwritten records and have a moderate number of monthly transactions.

Implementation tips:

• Use a dedicated expense notebook with pre-drawn columns
• Create a simple coding system for expense categories
• Set aside time daily or weekly to update the notebook
• Consider using a duplicate receipt book for backup

3. Spreadsheet DIY Method

Using software like Microsoft Excel or Google Sheets allows for digital tracking and basic analysis of expenses.

Pros:

• More organized and easier to analyze than manual methods
• Customizable to fit specific needs
• Basic calculation and reporting capabilities
• Easy to share and backup

Cons:

• Requires basic computer skills
• Manual data entry still needed
• Limited automation compared to specialized software
• Potential for formula errors

Best for: Owner-operators comfortable with basic computer use and looking for more analytical capabilities.

Implementation tips:

• Create separate sheets for different expense categories
• Use formulas for automatic calculations (e.g., totals, percentages)
• Implement data validation to ensure consistent entries
• Regularly backup your spreadsheet
• Consider using pre-made templates designed for trucking businesses

4. Accounting Software DIY Method

Specialized accounting software like QuickBooks or Wave offers advanced features for comprehensive financial management.

Pros:

• Automated categorization of expenses
• Integration with bank accounts and credit cards
• Advanced reporting and analysis tools
• Easier tax preparation
• Often includes invoicing and payroll features

Cons:

• Steeper learning curve
• Monthly subscription costs
• May offer more features than needed for small operations

Best for: Growing owner-operator businesses with complex financial needs and those seeking comprehensive financial management.

Implementation tips:

• Take advantage of free trials to find the right software
• Invest time in learning the software’s features
• Set up automatic bank feed connections
• Regularly reconcile accounts to ensure accuracy
• Use mobile apps for on-the-go expense tracking

The Benefits of Outsourcing Expense Tracking

While DIY methods can be effective, outsourcing your bookkeeping to a professional offers several advantages:

1. Time Savings: Focus on driving and growing your business instead of managing books.
2. Expertise and Accuracy: Benefit from professional knowledge in trucking industry accounting.
3. Scalability: Easily adapt financial management as your business grows.
4. Cost-Effectiveness: Often more affordable than hiring an in-house bookkeeper.
5. Access to Advanced Tools: Leverage sophisticated accounting software without the learning curve.
6. Regulatory Compliance: Stay updated on tax laws and regulations specific to trucking.

Cost Comparison: DIY vs. Outsourcing

DIY Costs:

• Time spent: 10-15 hours/month (valued at $50/hour) = $500-$750
• Software costs: $20-$50/month
• Total estimated monthly cost: $520-$800

Outsourcing Costs:

• Monthly cost for a small trucking business: $500-$1,500

While outsourcing may seem more expensive initially, the value of expert financial management often outweighs the costs. Professionals can identify tax savings, improve cash flow management, and provide insights for business growth. In conclusion, as an owner-operator, choosing the right expense tracking method is crucial for your business’s financial health.

While DIY methods can work for some, the benefits of professional bookkeeping services often justify the investment, allowing you to focus on what you do best – running your trucking business efficiently and profitably.

Final Thoughts

Running a trucking company comes with tight margins, but with careful management and strategic planning, it’s possible to maintain profitability. Always keep a close eye on your expenses relative to your income, and continually look for ways to improve efficiency and reduce costs.

Don’t let the burden of tracking expenses hold your business back. Explore CentsIQ‘s tailored solutions for small businesses and focus on what you do best