Truckers have a load of receipts to keep track of down the road.
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In addition to tracking gas, repairs, and tolls, they also must document such obscure expenses as laundry bills and costs to shower on the way to their destinations. Losing even one small receipt can amount to hundreds of dollars in lost deductions for gas alone.
"These folks are filling up their tanks every day. They can spend up to $300 every day. If they lose one $300 receipt, that's $120 in taxes," says John Turner, a sole practitioner who operates Houston-based John E. Turner CPA. "The nature of their business is they spend all their time in transit, 340 days a year, and need to keep track [of all their accounting] in their little cab."
About five years ago, the homes of two clients were flooded, forcing them to throw away all their moldy paperwork. When they were audited a few months later, Turner recreated what he felt the IRS would accept from industry data. Roughly 25 percent of those estimated amounts were disallowed, resulting in the truckers paying federal income tax and self-employment tax totaling 40 percent of the disallowed deductions.
Turner didn't want to see more clients encountering similar problems, so he created Road Ledger, a software package that helps truckers keep up with their bookkeeping and income taxes over the Internet. He also began a new company, The Trucker's Accountant, to provide the services.
Drivers get a scanner to load receipts into their computers, then send them to the company, where the data is entered and processed. The updated database is then sent back to the customer via the Internet within two to three working days and the information is stored on the company's server.
Before developing the application, Turner found that truckers did not make copies of their documents before sending them to tax preparers or the IRS because it was too expensive to do so at truck stops-up to $1.50 per page. But about half of them had computers in their trucks, which they were beginning to use for "load board" services, in which shippers post available loads and truckers can bid on them, connecting to the Internet at the truck stops.
He also wanted an affordable scanner that was smaller than a flatbed and was able to find one for under $100 that is only 10 by1.5 by1 inches, plugs into a USB port without needing an A/C outlet, and scans documents at eight seconds per sheet.
The technology took about three months to develop and he allowed about 35 to 50 of his trucking clients to beta test it in 2002. Since that time, four major updates have been released.
"The people that use it like the fact that they can have minimal hassle," Turner says. "It's efficient, they have the technology in the truck, don't have to be online to look at reports, [and] they produce their own financial statements."
Truckers can now enter the days they were on the road for meal reimbursement (75 percent of up to $52) and memos for miscellaneous costs for which they do not acquire receipts, calculate net income per mile, and develop budgets. New this past year is the ability for team drivers to calculate deductions.
The Trucker's Accountant can receive settlement sheets from trucking companies electronically, so that they can be imported directly into customers' files. This saves Turner about 1.5 to two hours per return, and he passes those time savings on as cost reductions.
Turner has seen at least 50 percent growth in his customer base each year, but moving forward would like to see his clientele switch from 90 percent individual drivers to mostly trucking companies, many of which are facing a large problem with driver retention, with up to 100 percent turnaround every three years.
"Most [drivers] didn't go to business school and so they go out of business. They get behind in their taxes and can't catch up. The drivers would come home after months on the road with bags full of receipts and dump it on the wife and she'd try to sort it and put it in some kind of order," Turner says. "We're interested in talking to the people in trucking companies as a means for helping these drivers become better business people."
Alexandra DeFelice is Associate Editor for Accounting Technology and can be reached at firstname.lastname@example.org.
The Trucker's Accountant
Accounting software brands: Road Ledger
Services: Bookkeeping, tax returns, and consulting