Owning a trucking company can be a challenging but rewarding experience. It is crucial to keep your trucking company’s financials under control and have access to the working capital you need to ensure the success of your trucking business. Financial management is the backbone of any business, and it is no different for trucking companies. We will share some of the things we have learned and discuss some tips to help you ensure your trucking company’s financials are under control so you succeed and grow.
Keep Accurate Records
The first step in managing your trucking company’s finances is to ensure you are keeping accurate records. You need to make sure you keep track of all your income and every expense, including fuel costs, maintenance expenses, and payroll. Using accounting software to help you keep track of your finances, such as QuickBooks, or a free online app, such as WaveApps.com, can be very helpful. An additional option would be to hire an accountant to manage your finances.
Create a Budget
Creating a budget is essential in managing your finances and understanding your cost per mile. It will help you plan your expenses and ensure you are not overspending or taking on loads that don’t pay enough. A budget will also allow you to identify areas where you can cut costs and save money.
Monitor Your Cash Flow
Cash flow is the lifeblood of any business, and it is no different for trucking companies. Regularly monitoring your cash flow is crucial to ensure that you have enough money to pay your bills and cover your expenses. You can use cash flow management tools to track your cash flow and identify potential problems before they occur. Additionally, working with a trucking factoring company can help increase your cash flow when needed. Factoring companies get you paid within hours of delivering a load. They eliminate the waiting game and uncertainty of when your brokers and shippers will pay you.
Manage Your Debt
Managing your debt is another important aspect of financial management, especially now with rising interest rates. It is important to keep your debt under control and pay off any outstanding debts as soon as possible. In fact, having your priority being to pay off the higher interest rate debt first can have the most benefit to your business. Doing so will help you avoid interest charges and improve your credit score. Working with a factoring company can help you manage your debt and increase your credit score as well. By getting paid quickly, you will have the funds to pay off outstanding debts as soon as possible and avoid additional interest charges.
Plan for Taxes
We all know paying taxes is a fact of life. Planning for taxes and setting aside money to cover them is essential. You can work with an accountant to determine how much you need to set aside and when to make tax payments.
In conclusion, managing your small trucking company’s finances can be challenging, but it is essential for the success of your business. By keeping accurate records, creating a budget, monitoring your cash flow, managing your debt, and planning for taxes, you can control your finances and ensure your business’s long-term success. If there is anything that Tetra Capital can do to help you and your business to keep your financials under control, give us a call at (801) 676-0182.