According to the Federal Motor Carrier Safety Administration, approximately 5.9 million commercial motor vehicle drivers operate in the United States. Many are employed by freight brokers, who have a sole responsibility to ensure that goods and cargo are transported to the right place at the right time. With all the responsibilities freight brokers manage, it’s only natural to make some mistakes. Here are just a few common mistakes freight brokers make — and how to avoid them.
Not prioritizing accurate record-keeping
Proper and thorough bookkeeping are essential with any business, but for freight brokers, it could make or break their operation. Any mistakes, even if they’re small, can lead to higher bond premiums, more expensive financing agreements, and other unexpected long-term expenses. If you’re unsure whether or not you can commit to keeping the record books up to date, consider investing in a load broker software designed to make bookkeeping and accounting as simple as possible.
Making sure you have enough assets to cover liabilities is also incredibly important. Freight brokers without sufficient bookkeeping experience often forget to keep track of liabilities and subsequently neglect to reverse the liability when the payment has been made. This results in both an overstatement of liabilities and understatement of the net income, which hinders others’ perception of your business’ financial stability. Avoid this by hiring an experienced professional to take charge of bookkeeping or investing in one of the various types of transportation broker software designed to simplify record keeping activity such as liabilities.
Incorrectly Categorizing Expenses
Finally, many freight brokers make the mistake of miscategorizing their expenses or designating an excess number of expense categories in general. While most businesses do have a standard set of expense categories, incorrectly categorizing any expense can be a major red flag that signifies to a loan underwriter than your record books are inadequately prepared and maintained. Fix this by making sure to properly install any load broker or accounting software. It’s also a good idea reach out to a professional bookkeeper or accountant for additional assistance, and never add new expense categories without considering them carefully.
Ultimately, avoiding these three major mistakes can optimize any freight broker’s day-to-day operations. For more information about load broker software, contact 3PL Systems.