Owning your own small business is exciting. The sky’s the limit in allowing your ambitions to set your goals. Being your own boss means you’re in control of your destiny. Run efficiently, a towing company can be quite profitable. Yet, the Small Business Administration estimates that 30% of small businesses fail during their first two years. One of the reasons behind these failures is poor administration. The good news is that there are a number of simple recordkeeping tips for towing businesses you can implement that will keep you operating long past that two-year mark!
Top Recordkeeping Tips for Towing Businesses to Operate Efficiently and Successfully:
- Use an accounting software system. Using a notebook, paper ledger, or spreadsheet program can be tempting to track revenues and expenses. However, none of these solutions are effective for well-run businesses. Small businesses must be able to report accurate numbers for quarterly and annual income taxes. An accounting software system will guide you through recording each transaction correctly and produce the reports you need for all types of financial filings.
- Keep your receipts. It’s not enough to remember how money was spent. You will need to have receipts to back up your transactions. If you are audited, officials will want proof that your accounting system’s transactions are legitimate. Many new software programs have scanning capabilities to keep your receipts electronically instead of boxes stored in a backroom.
- Take advantage of electronic transactions. Making payments via EFT transactions and credit card payments is not only fast, but it is also much easier for you to accurately track in your software program. EFT transactions are essentially bank-to-bank direct transactions requiring you to submit your bank’s “ABA” and account numbers. You can quickly review your transactions on your account statement or credit card invoice.
- Treat your petty cash box seriously. Petty cash makes it simple to run an errand and purchase small items. Yet, remember that you still need receipts to account for where every penny of petty cash was spent. Avoid giving employees free access to the petty cash box and ensure it is balanced daily.
- Pay employees correctly. As soon as you hire your first employee, you must have a software payroll system ready. Paying employees “under the table” is recipe for disaster. Start your business off right by following IRS regulations for establishing employee eligibility, and then ensure each is taxed correctly. Make sure you understand how to correct payroll errors and be ready to provide annual statements to employees as required by law.
- Retain records. Records must be retained for auditing purposes for different lengths of time, depending on the document type. The IRS has a publication outlining the expectations for all of these documents. Often the records can be stored electronically; just make sure you have a suitable method for organizing the documents so you can find them quickly down the road.
How can Collins Manufacturing help?
We have a history of working with our customer companies to help them achieve success. While you’re focused on running your business, allow our pros at Collins Manufacturing to introduce you to top-of-the-line towing equipment your employees and customers will love. Our Collins Manufacturing’s Hi-SpeedⓇ Dolly and Carrier Dolly systems are easy and safe to operate, light to transport, and durable to handle the toughest towing jobs. By providing our towing solutions for your employees, you’ll make their lives easier and see their job satisfaction grow.
Collins has been an industry leader in towing equipment for over 45 years. Our Hi-SpeedⓇ Dolly and Carrier Dolly systems provide towing professionals with lightweight solutions durable enough to get even large vehicles out of challenging situations and transport them safely wherever they need to go. Our products are designed with safety first to keep your employees safe while attaching and moving vehicles. Visit our website or give us a call to learn more about our products.