How can those figures be helpful? For those of us that are not on a flat rate and do not get paid on a settlement for all miles, these numbers are crucial. Is your theory at the end of the year I have money in the bank so something is working right? That is better than at the end of the year and you are wondering, where did all of my money go?
How do you track your expenses and income? Do you track these numbers?
There are many ways and it depends on you to what works best. There are services such as ATBS that will track expenses for you. Send in all of your receipts and they do the rest. Some drivers use spreadsheets, some use their check register, some use Quicken and others use Quick books. It doesn’t matter how you track expenses just as long as what you do is accurate. Everything adds up from the money spent at the laundry mat to the money spent getting the truck washed theses expenses are deductions. Any receipt lost is a loss for your business.
When I track expenses or income per mile or per day it is all in. If I spend it I count it and if we drive it I count every mile. How can we get an accurate figure if everything is not all in? Within our business, we are paid a salary and that salary is included in our expenses. If we drive to the movie or to go shopping those miles are counted. At the first of the year, I write down our starting mileage and that is the starting figure I use for the rest of the year.
Why track days expenses? Each day we are out on the road it costs us and each day we spend waiting on a load makes the next load need to pay higher in order to cover the days sitting. To figure your cost per day take your expenses and divide by days on the road and if wanting to know income per day take income to date and divide by days. Sometimes a load that does not look real good looks better when you take in the cost of sitting for another day waiting on that perfect load. Knowing our expenses per all miles is also figured on what our cost per mile is. The same principle, take the expenses and divide by miles driven to date.
When we let our expenses or our cost per day be more than what our income is we have a very serious problem and our business will not last long. Having an expense tracker for each month to check off when a bill has been paid and to know when a bill is coming due is helpful. Keep a maintenance fund that is added to each month or if the company you are leased to has a maintenance fund you can contribute a percentage to each week or month take advantage of this. Paying interest when having to borrow money to buy tires or anything for our business is akin to throwing money in the trash can. If you cannot afford a maintenance fund you sure cannot afford to pay interest on a loan to buy a tire.
There is no shame in not liking bookkeeping the shame is when we hide our heads in the sand and let those expenses get lost. If bookkeeping is not your thing hire someone to do it for you. Just the same as working on the truck if you do not like working on your truck hire a mechanic. Spend your time doing what you are good at and quit wasting it beating your head against the wall keeping track of pennies and dimes that are spent. In the long run, hiring someone to do this for you will save you money and give you peace of mind.
Start 2019 off right either by hiring an accountant or keeping your books yourself. Just do it!