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If you would like to hear these articles in audio or download them to your computer or mp3 player you can go to my website: www.masterthejourney.com.

Let’s talk about tracking your business numbers.
In the past I’ve focused mostly on keeping good records in case of an IRS audit. In this series, I’m going to cover tracking your business performance and how you use those numbers to improve the bottom line and put more money back in your pocket. Because isn’t that why your in business? If you’re going to work as hard as you do, don’t you want to make as much money as possible? You can’t improve something if you can’t measure it first.

What surprises me is that I speak to thousands of owner operators every year and less than ten percent of them accurately track their cost per mile or percentage of income. I think the biggest reason so few owner operators do this is because they just don’t understand how to do it and they don’t have the proper tools to do the job easily. I think it helps to have the basic understanding of how to calculate the numbers manually. I just finished a new software program that will track all of these numbers with the least amount of effort on your part.

I teach a lot of owner operators how to lower costs in all areas of their business, fuel, maintenance, taxes, interest costs and many more, but if you don’t know how to track and analyze those numbers it’s really hard to improve them. In order to track your cost per mile you need to know your mileage for a given period, so start writing down your odometer at the start of each month. When we decide to set up a system to keep our records we need to know why we’re keeping them in the first place. There are really only two reasons to keep all of that paperwork around, the first is that the IRS requires us to be able to prove our income and expense in case of an audit, and the second is so we can measure and improve our business performance.

The IRS wants paper, actual receipts and documents and for our business performance we want numbers and reports. The IRS wants totals for the entire tax year and we want numbers monthly and year to date. So our system needs to have two parts so that we can achieve both objectives. First we need a system to file the paper receipts and documents and this should be sorted by the expense category for the whole year not by the trip or the month. So a good expanding 21 pocket folder works great, I break the expense categories down into 18 different expense accounts exactly the way it will be reported on the tax return. That way it will be easy in case of an audit and everything will match.

Once you have the receipts sorted and filed then you need a system for totaling your numbers and calculating profit and loss, cost per mile, and I also like to use something called percentage of income. The second part of your system should be some sort of computer software that will total and track the numbers and give you the types of reports we need to run a profitable business. I’ve been reviewing trucking software for years and I have to be honest, I have been completely disappointed with everything on the market (I could write an entire column on what is wrong with them).

I took my 15 years experience doing accounting and tax work for owner operators and looked at all of the things wrong with the other software on the market and created “Gauges” Trucking Software. It’s like having a dashboard for your business, everytime you open the program, you’ll see the important numbers you need to run a profitable business. It’s fast and easy to use and doesn’t require you to put in a bunch of data you’ll never use again. Give it a try and see what you think. You can get your copy here www.kevinonxm.com or call 888-262-8585.

Kevin Rutherford
The Rutherford Group
www.cmcseminars.com
trucktax@mac.com
888-CMC-8585
888-262-8585