Benefits of Outsourced Accounting for Trucking Companies

Authored By: Garima
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The 2024 American Trucking Research Institute’s report points to several financial issues likely to confront the transportation sector. 

These challenges include the freight recession that began in 2022, resulting in rising marginal costs and numerous disruptions.

The next challenge that destabilizes the finance and accounting of truck companies is a combination of factors, including significant increases in insurance premiums driven by nuclear verdicts, rising healthcare costs, and increased litigation. 

Such financial expenses are further magnified by the incidence of abuse of litigation, thereby placing considerable pressure on ventures.

Plus, there is a 22% increase in the operational cost from the last 2 years, marking the highest increase in the swipe out of many small businesses.

Compounding these issues is now the move to battery electric vehicles (BEVs), which will need more than $1 trillion invested in infrastructure and vehicles in the next 15 years.

Moreover, problems that persist in the market, including driver deficit, increase in operating costs, risks of litigation, cargo loss, and congestion costs, negatively impact the financial structures of the industry.

In response to these challenges, accounting outsourcing emerges as a strategic solution for trucking companies seeking to navigate economic uncertainties and operational pressures.

Accounting outsourcing for truck businesses can enhance payroll processing and benefits management.

It may also enhance the management of payroll and benefits, as these functions are important factors to encourage and maintain the drivers in the increasingly congested market.

Furthermore, the business also decreases risks linked to nuclear verdicts and litigation through accurate compliance audits and expense tracking through outsourcing.

This approach allows trucking industries to focus on managing operations and adapting to an economic condition in the best manner.

So, this blog post will give you insights about the advantages of outsourced accounting for trucking businesses.

Let’s proceed and find out why you should contract the operations of your account.

What is the Need for Specialized Accounting Services in Trucking Companies?

The trucking businesses are different from the others. Hence their financial requirements are also different and demanding for precise accounting. So below are the reasons listed for the precise accounting for the truck businesses.

Fuel and maintenance costs are volatile as they come up with multiple surcharges and additional taxes. Thus, an expert with domain-specific knowledge is needed for maintaining these accounts.

Truck businesses are required to follow the industry regulations and tax laws. Which is yet another crucial component of accounting for truck companies.

Managing complicated billing, invoices, freight payments, driver settlements, and other payment-related matters takes a lot of time if you are a newbie to accounting.

Staying profitable in this business is like sitting on the fence, and for this, a continuous cash flow is important, and its monitoring requires an expert.

If you consider an onsite accountant for managing your trucking business finances, then it may cost you around $99,478/year.

Source: ZipRecruiter

On the contrary, when you outsource accounting services for your truck business, it will allow you to save around 70% on operational costs.

What is Outsourced Trucking Accounting Service?

Outsourcing accounting for a truck business means hiring a third-party service provider to manage your finances and accounting for the truck business.

The reason for looking to outsource the accounting operations, like keeping accurate financial records, ensuring compliance with tax and regulatory requirements, tracking fuel expenses, driver pay, vehicle maintenance costs, invoices, and compliance with relevant regulations, and improving decision-making through financial analysis and forecasting, is that companies are looking for a permanent, stable, and reliable solution without going over budget.

Secondly, these accounting services and tasks are complex and may directly or indirectly come under law. As a result, freight companies try to avoid making any mistakes because even one could cause them to default and be subject to legal scrutiny.

Benefits of Outsourced Accounting for Trucking Companies

There are multiple benefits of getting outsourced accounting tasks if you have a truck business. The list of a few is detailed below:

1. Get Your Financial Reports Improved with Virtual Accountants

Truck accounting is different in many contexts as it revolves around many factors, which include revenue tracking, fuel management, driver payroll, overtime of drivers, vehicle maintenance, revenue generation, compliance reporting, and others. 

These additional elements make it complex and unique and demand deep precision, which is not a cup of tea for everyone. It requires an accounting expert who is well-versed in tackling all these services. 

When you outsource accounting services for transportation businesses, especially for trucks, make sure that you have chosen a reliable partner like Invedus. 

Their virtual accountant or team (whatever you choose to manage your accounting tasks) ensures that your financial tasks are done with accuracy and with the use of the latest accounting software. 

2. Have a Precise Financial Forecast

Proper cash flow management is a necessity for every company that operates in the commercial truck industry and needs to adhere to achieve such stability. Your virtual accountant from Invedus will do this for you perfectly and ensure that your business will not be stagnant or get stuck because of bad financial decisions.

To improve cash flow forecasting, the outsourced accountant will actively manage accounts receivable and payables to ensure timely payments, negotiate favorable payment terms with suppliers, forecast future cash flow, identify areas to cut unnecessary costs, and meticulously track expenses.

It has the added advantage of preparing the trucking companies for future costs, thus minimizing truck expenses.

3. Make Your Accounting and Bookkeeping More Accurate

It is essential to have a transparent picture of your logistic accounting. You need to enter your daily expenses in your bookkeeping software, including vehicle maintenance, driver overtime, and others. In case you lose the receipts, you don’t have to get entangled in the mess.

To avoid this situation, you simply need to update your books regularly. These are the smartest ways to access your data in a snap. However, managing these books is not a cakewalk, and a single mistake can spoil the entire financial statement.

In this scenario, it is better to hire the right accountant to manage your books.

Using a professional trucking accountant to handle the accounting for freight companies will help you avoid common mistakes.

By doing this, you can improve the organization’s workflow, maximize your time, and help with accounting accuracy.

4. Well-Managed Invoicing and Cash Flow

Effective and uninterrupted cash flow is a must for any business. Reports show that 82% of LGV (large, not light) businesses fail due to inadequate cash flow. 

Effective accounting management lowers stress, improves vendor relationships, and avoids overdrafts.

Outsourced logistics financial management experts will enhance your cash flow by keeping accurate records, advising on payment timings, and alerting you when external funding is needed, making them invaluable for logistics companies.

5. Your Driver Payroll Management Will Always be Updated

Trucking companies need to manage a complex payroll structure that includes hourly wages, overtime, per diem expenses, and mileage pay.

Mismanagement in any of the segments will lead to discrepancies and employee dissatisfaction. 

Outsourced accounting professionals for truckers will ensure payroll processing, reduce errors, ensure timely payments, and enhance driver satisfaction while managing tax obligations effectively. 

6. You will not be bogged down in intricate tax regulations.

Compliance with applicable tax and regulatory requirements (Section)

Managing tax laws and regulations in the US is quite challenging for US truck companies, as it encompasses federal, state, and local tax requirements like fuel and mileage taxes.  

Outsourcing accounting for logistics companies can ease this truck accounting burden with accurate tax preparation and filing of tax returns, audits, and financial optimization. 

Businesses can avoid expensive penalties and fines by hiring virtual accountants who are up to date on regulatory challenges. This allows them to focus on their core business without having to worry about compliance issues.

7. Accounting Outsourcing An Affordable Option

By offering flexible support and lower costs than hiring domestic resources, outsourcing accounts and finance operations can help logistics companies save money. This method facilitates scalability without incurring significant recruiting or hiring overhead costs.

Further, the outsourced accounting professionals you have chosen provide clarity and transparency in financial management, assisting in the identification of inefficiencies and areas for expansion.

For truck owners, outsourcing bookkeeping eliminates the need for extra staff and expensive software with flexible payment plans that allow businesses to focus on growth while remaining cost-effective. 

Want a Reliable Accountant for Your Truck Business:- Invedus Has You Covered!

Invedus offers specialized bookkeeping services for truck businesses to manage their finances effectively.

Their solutions help LGV (large, not light) businesses focus on their core function of efficiently delivering goods by streamlining financial operations, ensuring compliance, and freeing up time from administrative duties.

To know more, fill out the form below.