We do our bookkeeping to know the truth
I learned today how to use a new voice recorder, microphone and telephone pickup. Learned by receiving them via UPS, reading the instructions and trying them out. I also learned more about our 2011 truck business numbers. Learned by reviewing them and filling in some holes.
Diane and I woke up this morning in our Florida vacation house where we plan to stay until mid-February. Today was the same as most other days we have spent here.
New today was learning how to use the voice recorder and accessories that were delivered yesterday. I bought them to use at the upcoming Sylectus Annual Conference 2012 which begins later this week.
• It’s tax time; that glorious time of year when Americans pour hours and sometimes days of unproductive time into preparing forms for the government. These forms are far more complex than they need to be; so much so that many citizens spend money to hire professional tax preparers to complete the legally required task.
I have been self-employed for most of my adult life and tax return completion has been a hated chore, mostly because I resent being forced to complete needlessly complicated forms for the government. Business accounting makes perfect sense. You want to know how you are doing and how to improve. Tax accounting is ridiculous because the tax laws that lie behind the forms that we are required to complete are a politicized, dysfunctional, insane mess. This annual ritual has become so deeply rooted in the American way of life that it seems normal to most people. That’s sad, but I digress.
Diane and I left our white-collar careers and got into a one-truck business in 2003 partly to simplify our lives. That worked in many respects in our little, one-truck business (no client base, far fewer business phone calls and meetings, greater freedom to take time off, shorter hours, etc.). But when it came to the paperwork, life grew more complex. The number of financial transactions dramatically increased.
It is amazing how fast receipts build up in the truck. Out on the road you are continually passing money across merchant counters for things like food, fuel, truck supplies, truck maintenance and repair, etc. Depending on where you are driving, you may pay several tolls a day and get a receipt for each one. Weekly and monthly transactions include fees charged by your carrier, and government entities. And you have your monthly bills for things like your house payment and utilities, truck payment, transponders, cell phone use, insurance, and so on.
If you don’t keep up with your bookkeeping, these transactions can bury you and you can become hopelessly lost in your business. You will find yourself busy hauling freight and keeping your truck running but you won’t know whether you are making money or not, because the truth about your business lies hidden in that continually growing pile of receipts and statements that is easier to ignore than attend to.
It happens all too often that truckers stay busy with their work but neglect their bookkeeping. This failure to pay attention to the money produces one case after another where a self-employed owner-operator who is in business of his or her self will work hard for years only to have little to show for it in the end. Making money and keeping busy are not the same thing. Truckers who keep up with their bookkeeping and pay attention to their money know the difference.
Diane and I have never let our bookkeeping get so neglected that we did not know the truth about our business. We have fallen behind at times, such that working to catch up was a double downer. It is a downer once because bookkeeping is not fun. There are many other things we would rather do. It is a downer twice because when we fall behind, we hate ourselves for doing so and that makes it more difficult to stay focused on the task at hand.
It’s analogous to driving. It’s a lot easier and more fun to cruise under load on the open road than it is to spend hours working your way out of stop-and-go traffic just so you can get moving and get paid for more than a mile or two an hour. It would be wonderful if all we had to do was the open-road part of the job, but if we want to be paid anything at all, we have to complete the entire trip, not just the fun part.
Diane and I keep track of every penny we earn and spend — every penny! It does not matter if it is tax deductible or not. If it is a penny, a dollar or $10,000, we document it. Diane documents the money she puts in coin laundry machines and the newspapers she buys. If I find a nickel on the ground, it gets entered in our spreadsheet as found money. If we are in the checkout line at Walmart and are moved to slip some cash to a single mom or old man who is putting items back into his or her cart for lack of money, that non-deductible, no-receipt gift gets entered in our spreadsheet.
Bookkeeping today consisted of minor hole filling. We had about 1,400 financial transactions in 2011. One of them was for an unusual amount for food purchased at a truck stop a few months ago. It took some head scratching and memory jogging to remember the information I failed to note on the receipt when the expense was incurred. The spreadsheet hole was filled when we remembered that I bought breakfast for a group of drivers I visited with that morning. Another hole was a date improperly entered. Something seemed to be purchased in a town on a date when we were not there. Again, it took some head scratching and memory jogging to get the date right.
Bookkeeping still isn’t fun, but it is nice this year to not be behind.