If you want to be a successful truck operator, you need to learn how to handle your business finances fast. It is not enough to know where your money goes and how much cash you get to keep each day. There is also a need to look for ways to reduce your costs and save money for future expenses. The last thing you want is to waste resources on areas where you could have saved a lot of money. Aside from taking precautionary measures and ensuring your trucks are kept well-maintained, the following tips can help you make the most out of your business finances.
Understand How Your Accounting Works
You may have the resources to hire an accountant to do your accounting, bookkeeping, and tax preparations. But this does not mean you should skip learning how your accounting works. It is only a must that you understand your business’ financial health as this can help make better-informed decisions that can drive future business growth.
Familiarize yourself with financial terms and statements. Work with a certified accountant who can effectively offer bookkeeping and tax services for truckers. You get to stay compliant, keep the IRS off your tail, and have more time managing your business by hiring the right services.
Prioritize Your Driver’s Health Screenings
Whether you are the only driver or already employed multiple drivers for your trucking business, your driver’s health should always be a priority. When your drivers are healthy, you can improve your fleet’s safety and reduce the risks of accidents, delays, and the safety of your cargo. Think of health screenings as an investment for your business.
Truck drivers often work long hours each day. Some turn to smoking, snacking on unhealthy food, or even skipping meals to keep themselves awake and arrive on schedule. Some lack enough rest and sleep, while most don’t get enough exercise due to a trucker’s sedentary nature of work.
With health screenings, you can check your driver’s health each day and help them achieve a healthier lifestyle and address existing health issues. The more you care about your drivers, the more they tend to stay and provide excellent service to your business.
Save Up Enough Rainy Day Funds
As a golden rule, you should have at least three months’ worth of operational costs for your rainy day fund. Continue to build up your savings. Don’t forget to save a separate fund meant for your fleet maintenance.
When you save money to finance future expenses, you give yourself peace of mind knowing you are less likely to worry about getting the funds to pay for the costs. This could mean sudden truck maintenance, replacement of one of your truckers, or even settling a bill after one of your drivers got into an accident.
Learn How to Get Paid on Time
These days, you can take advantage of trucking industry software to streamline your invoices and ensure you get paid faster. It also allows you to make more money and increasing savings by:
- Send out accurate invoices ahead of time
- Avoid misplaced invoices
- Reduce the likelihood of making tax reporting errors
- Ensure your truck drivers are paid on time
- Sending reminders when your customer’s invoices are due
Aside from reliable software, you want to make sure you set clear expectations before accepting a client. The same goes for choosing the right client to work with. It pays to run a credit check and see if your prospective client can make payments on time.
If you plan on pursuing a partnership with another new business, you can take precautionary measures to make sure you get timely payments. This can mean asking for a down payment before you offer any services. You can even encourage prompt payment by offering rewards to clients who pay on time.
As a new truck operator, you want to limit your spending and, as much as possible, avoid raking up debt. It is easy to say yes to low-interest rates when, in reality, the hidden rates can knock your finances down. Before you acquire credit, consider delaying your purchases and think things through before financing something.
If your purchase is crucial for your business and can yield a high return on investment, consider buying it with cash instead. This can mean waiting until you save enough cash to be able to afford the purchase. But then you don’t need to worry about future monthly payments with interest fees for paying it in cash.
Being new in the business does not permit you to make costly financial mistakes. The earlier you start handling your finances well, the easier it will for you to build your business minus the money headaches. Invest in your driver’s health, avoid the credit trap, save money as part of your contingency plan, and learn the tricks of getting paid on time.