Basic Accounting For Trucking Companies
In this article, I will explain why you should keep good records, which ones you need to keep, and how long you need to keep them. Failure to do so could stall your operating authority, affecting your ability to do business. Trucking companies must keep Driver Qualification Files and Safety Performance History documents for as long as the driver is employed and for three years after. It’s not an easy feat to stay compliant with all of the DOT rules and regulations, especially when things are continually changing. Maintaining good records is imperative, however, and failing to comply with any aspect of the record keeping rules is not an option.
In addition to attracting customers, a positive reputation can lead to partnerships and collaborations with other businesses in the industry. Trucking companies that have a reputation for compliance and professionalism are often sought after as trusted partners. These collaborations can provide new business opportunities and expand the company’s reach. Last but certainly not least, it’s always a good idea to hire a CPA for help with tax preparation and trucking accounting services. The IFTA is a way to redistribute the fuel taxes truck drivers pay in the lower 48 states and the 10 Canadian provinces. It ensures your funds go to the areas where you used your fuel instead of the ones where you purchased it.
If you link your trucking accounting software to your business bank account and credit card, it should track your every invoice and expense automatically. Even then, most state-run DOTs require that drivers adhere to the compliance regulations. To comply with the FMCSA’s regulations, you must consistently reapply for and update your licenses, insurance policies, and other pertinent documentation. Your company’s reputation, permits, and legality depend on strict, continuous adherence.
Record keeping for truck drivers is a must, but it doesn’t have to be complicated. Nick Gallo is a Certified Public Accountant and content marketer for the financial industry. He has been an auditor of international companies and a tax strategist for real estate investors.
By implementing and enforcing a well-designed policies and procedures manual, companies can cultivate a positive reputation that boosts their business success and sets them apart in the industry. A positive reputation also contributes to business success by attracting new customers and retaining existing ones. When potential clients see that a trucking company is known for its adherence to policies and procedures, they are more likely to choose that company over competitors.
Meanwhile, the HVUT is an annual fee that truckers must pay if they drive a vehicle that’s at least 55,000 pounds for more than 5,000 miles on public highways. It equals $100 plus $22 for every 1,000 pounds over 55,000 pounds up to $550 and 75,000 pounds. The IFTA office in your home state will allocate your payments to the proper jurisdictions and determine whether you owe more or deserve a refund.
- This manual acts as a guiding document that outlines the company’s expectations, standards, and protocols in various operational areas.
- Even some CPAs are unaware of the specifics of the industry, where unique rules and changing regulations can cause you to misreport your tax-deductible expenses.
- Both the Driver Qualification and Safety Performance History Files must be retained for as long as the safety-sensitive individual is employed by the company, and for three years thereafter.
- Controlled Substances and Alcohol Testing to ensure a drug-free workplace and comply with Department of Transportation (DOT) regulations.6.
- The Federal Motor Carrier Safety Administration (FMCSA) requires the companies they regulate to keep records to document their compliance with safety regulations.
Hours of Service Regulations
Records of all drug and alcohol tests performed on drivers must be maintained in a secure location under lock and key away from regular personnel files. As an employer, it’s vital that a transportation company, or carrier, maintains accurate records of all payments made to drivers. This includes regular payroll payments, settlement sheets, and any other related documentation. Not only does this documentation prove that the company has made the appropriate payments, it also provides information driver’s wave community and the company will need when tax time rolls around. Electronic logging devices (ELD) are meant to create safer conditions for drivers and to prevent fatigue-related accidents or issues. When connected to the vehicle’s engine, ELDs automatically records information to make it easier and faster to track, manage and share records and helps drivers track their limits.
Basic Accounting For Trucking Companies
Depending on the record, you may have to keep certain files for up to five years to be in compliance with the Department of Transportation (DOT) rules. All freight that is transported by a carrier must be accompanied by a bill of lading (BOL) this acts as a receipt for the freight services as well as providing details about the contents of the shipment. It is a legally binding contract that provides the driver and carrier with the details necessary to process the shipment and invoice the shipper properly. A manifest is also required which acts as a type of tally-sheet giving a detailed summary of all the bills of lading that are included in a specific trip. Remember, it’s easier to create a clean, organized DOT record-keeping system from the very beginning.
The Benefits of a Well-Designed Policies and Procedures Manual
Fleet owners and drivers are expected to comply with the rules and regulations imposed by the DOT, or face stiff fines and penalties. Rules and regulations are continually updated and revised making it imperative that fleet owners keep operating income up with the changes to ensure compliance. A positive reputation is essential for the long-term success of a trucking company.
What is a DOT safety audit?
If you need further assistance with your trucking company’s bookkeeping, you can explore more of the articles we have written, or call ATBS for all of your accounting, tax, and bookkeeping needs. Federal Motor Carrier Authority Filings can help you understand and meet the DOT requirements for trucking companies. Contact us at Whip Around for more information about DOT compliance, a complete guide to california payroll taxes record keeping, vehicle inspection reports, or any other related topic.