If you’re running a tow truck business, you’ve got a lot to think about. Business is the operative word of the phrase “tow truck business” after all. And a major part of running a business is having organized finances. Maybe this isn’t the favorite part of your job – numbers, dollars signs, all that. Frankly, math and numbers aren’t a lot of people’s favorite thing. But we’ve got some tow business finance tips for you to hopefully make things easier.
7 tips for tow business finances
1. Keep the money separate.
It’s important to have separate checking accounts for your towing business’s money and your own personal money. Otherwise, it’ll be a nightmare trying to keep things organized. Basically all of your business expenses and such are for the business account, and all your personal expenses from, you know, living, are for the other account. (As far as paying yourself goes, pay yourself and put the check into your personal account.)
2. Think about accounting software.
Accounting software can be a big help when it comes to keeping everything organized and keeping track of all the money. It’s intended to make life easier, so do some research to see if there’s accounting software that’ll suit your business. There are a lot of options out there. Think about what you need the software to do – for example, will you need it to take credit cards? Also – how expensive will it be? Is it user-friendly? Your tow business finances can stay all in line if you have account software.
3. Have an accountant.
Having an accountant can also be a big help when you’re setting everything up. Not to mention the dreaded taxes. It’s important that you’re not making any IRS goofs or anything. Make sure to choose a trustworthy, licensed professional who understands the towing industry. Towing is very unique, so it’s best to partner with someone who gets the ins and outs of your business. (If you need to, ask for referrals from others who might have a recommendation.)
4. Step up your invoice game.
You also have to make sure that your invoices are organized and detailed. You can think about getting 3-copy invoice booklets that have your company’s name and logo on them. (A pro tip is that you should make sure that your invoice numbers will still be sequential when you order new books – you don’t want to start all over again at Invoice 1 if you’ve just used Invoice 300.) Remember to keep up with all your invoices – don’t forget to write things down! We all like to think we have the memories of elephants, but we forget things.
5. Remember that the account balance doesn’t reflect the big picture.
Week by week and month by month, things are going to look different as far as your account balance goes. You might have more expenses in one particular week, so when you go to see how you’re standing financially, look at the big picture. Don’t just look at the number and panic. You’ve got to go over your expenses, income, and so on and give yourself a truer idea of where you stand.
6. Be organized and uniform.
It’s also important to stay organized and to keep all of your invoices and records uniform. When you come up with the labels for your income sources (cash calls, etc.) and expenses (i.e. fuel, insurance, tires), keep with them. Make sure that the way you enter your invoices is the same each time. You’ve got to keep up with the detail in your records and you’ve got to stick to your methodology. It might feel like it takes more time, but in the end, you’ll be thanking yourself when your invoices, expenses, and so on are all neatly labeled and easy to understand. Just get in the habit and stick with it.
7. Remember that this can help you grow.
Keeping track of your finances can set you up for success. If you’re looking to grow your tow business, you need to have your finances in order so that you have a firm foundation.
Another part of having a tow truck business is making sure you have the right tow truck insurance. Get started with tow truck insurance quotes by filling out our online form, giving us a call, or messaging us on LiveChat.
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