Step 1: Control Fuel Costs
If you are an owner-operator, fuel cost is a major part of your expense. Managing your fuel cost will help you save more money and increase your profit margin. Reducing your driving speed, limiting vehicle idling time, managing route and choosing low-fuel-tax states are some of the best ways to bring down fuel costs.
Apart from these measures, keeping your vehicle well-maintained, planning out your route, constant tire checks will also contribute to improved vehicle performance and in turn contributes to less fuel consumption and better savings.
Step 2: Pay Your Taxes on Time
File your taxes well ahead of the due date and ensure that you are compliant. If you’ve incurred a penalty, ensure that you clear your dues and have all the documents ready during audits. When you e-file your 2290 form with eForm2290, you will receive a copy of Schedule 1 within minutes.
Keep printed copies of your Schedule 1 in your vehicle as well as in your records so you can present it as a proof if you get pulled over or during audits. The penalty for not filing your form 2290 on time is 4.5% of the unpaid taxes for each month; or part of a month that a tax return is late. Penalty will start accruing a day after the tax filing due date.
The failure-to-file penalty is 5% of your balance due for every month (or part of a month) in which your taxes go unpaid.
Step 3: Keep Proper Records
Although your primary focus is to improve your business and profit margins, it is equally important to maintain proper records of all your important business documents.
As an owner-operator it might be difficult to keep track of all your documents, and if you find yourself struggling, hire bookkeeping and accounting professionals to do it for you. Keeping a tab on your expenses, routing and fuel costs and invoices will help you optimize your business, analyze costs and stay on top of your tax payments and other dues.
Step 4: Stabilize Your Cash Flow
Keep a healthy cash flow to cover operating expenses like routine maintenance, insurance, and fuel costs as well as keep enough cash reserve for unforeseen circumstances like road accidents or unexpected breakdowns.
As freight bills are paid after the delivery, you need to make sure that you have enough cash in hand to cover your expenses and keep things rolling. Stick to a routine fleet maintenance schedule to keep your vehicle tuned up and avoid unpleasant surprises on the road. Assess your expenses and identify areas where you could save costs.
For instance, you can rely on an equipment leasing company to rent equipment rather than buying an equipment that needs to be upgraded every few years. There are fuel programs that will let you track and manage your fuel spending.
When you manage your cash flow and get faster access to your working capital, you will be able to grow your trucking business much faster.
Step 5. Deploy Efficient Tools and Technologies
As an owner-operator, you may not be able to manage or control each and every aspect of your business. That’s why you must invest in tools and technologies that will make it easier for you to optimize operations and boost productivity.
From accounting and routing to dispatching and invoice management, there is plenty of software in the market that will help you streamline your business by automating operations and streamlining processes.
Read our blog on Best Trucking Management Software to learn more about the best tools that will help you manage your business efficiently.
While there are many factors that will contribute to your business growth, the above five steps will definitely give you a head start in growing your business. Thanks to online e-filing providers like eform2290, staying on top of your tax payments is now easier than ever amidst the global pandemic.