Software for Drivers

When choosing a computer program it is important to think about what you are going to use it for and to look out for any pitfalls. In this article, we can help you to decide which is the best program for Taxi Drivers, Private Hire Drivers and Chauffeurs.

Driver accounting requirements are quite simple, depending on whether journeys are all paid for at the end of the journey or if invoices are to be sent to account customers.

CASH ONLY ACCOUNTING - This is very straightforward. It is necessary to record the total cash receipts for any given period (e.g. day, week, month). The more frequent you record the information the more accurate it is going to be. Getting into a good routine also helps to make sure the job gets done instead of leaving it until later, and later, and later until it becomes a problem.

In addition to income, there will be expenses that need to be paid. These can also be paid in cash or, epscially for fuel, you may have a credit account which is paid, normally, monthly. It's a good idea to record all of these expenses, at the time that they are incurred, in order to get full advantage of income tax allowances.

An accounting program for this type of cash-based work should be very simple to use yet provide the flexibility to record the income AND expenses the right way..

ACCOUNT-BASED WORK - This requires recording the journey details (who the client is, who the passengers were, where they went from and to and the price).  Expenses will be dealt with the same way as above - either paid in cash or when you receive a statement from your supplier.

Drivers who do account work will need software that enables them to send out periodic (normally monthly) invoices/statements. The software also needs to be able to record the payment when it is received so the driver can keep track of who owes what.

Options for keeping financial records:

a) Keep no records at all - Whilst in practise, this is a real option, and some people do choose this option, the downsides are numerous and potentially very costly.

On a simple level the driver will have no idea how much his business is doing or when the busy and quiet times are. He can have a feel for it but there is no real substitute for a good set of financial records.

If accounts are to be sent out to clients, keeping no records at all is certainly not an option. If records are kept with pen and paper, sending out monthly invoices is a chore and unlikely to be accurate. Without a computer system, it's difficult to keep tally of who paid and who still owes money. 

A significant external factor is the local tax authority. All jurisdictions world-wide require that self-employed persons keep true and accurate financial records. Taxes are based on these records. If they are incorrect or deficient, serious penalties can be imposed. These penalties can have significant adverse consequences. All this can be avoided by keeping good records with an easy-to-use program.

If you don't keep good records and you rely on handing all of your paperwork, receipts etc. to your accountant at the end of the year, you can probably get away with it. You just have to make sure that you give him/her ALL of the relevant paperwork and that he/she collates it fully and correctly (it's a time-consuming job so will either be rushed or given to low cost junior staff). You can also be sure that you will be paying for the time taken to do work that you could have been doing yourself a few minutes a day, at much less cost.

b) Use a spreadsheet.

Spreadsheets are very useful tools for recording and analysing numbers. A spreadsheet is however either too simple and prone to errors or very difficult to program and even more prone to errors. It's very difficult to get a spreadsheet to do the invoicing especially if you have more then one client and more than one page of journeys per client.

Some "software" providers offer solutions which are Excel based. These are typically very low cost - from 99p, £5.99 and £11.99. The effort put in by the creator is credit-worthy, showing great skills in making such a program from an empty spreadsheet. The low cost can however be indicative of issues lurking in the background. Reliance is placed on a 3rd party supplier for the base software. The base software will normally cost at least around £100. If it is upgraded, the accounting program may no longer work. Sometimes this software is worth trying but bear in mind that data entered may eventually be lost because of limited functionality or version changes in the program.

c) Use a general accounting program like Sage or Quickbooks.

These programs have been around for several years. They benefit from having several thousands, even hundreds of thousands of pounds spent on them in development time. They are great programs in their own right. They generally do "what they say on the tin". However, there are reasons why a taxi or private hire driver may find these not to be the best choice.

The obvious reason is cost. Sage starts at well over £100. Quickbooks is cheaper. Both of these programs however are quite complex, much too comprehensive for your needs and most importantly, not very well structured to capture the information you need. You will find yourself typing in much more information that you need to - for every journey that is to be invoiced or for all cash receipts and payments. For general businesses, this type of software can be excellent, but not for taxi and private hire drivers.

d) Use a program designed for your trade.

Programs like PHATsoft (Private Hire & Taxi SOFTware) has been designed and developed with drivers in mind. The input screens are structured for quick input of information relating to the journey and there is a Quick Input screen for cash totals which can be entered daily or less frequently. PHATsoft handles expenses whether they are paid cash or put on account. You can send out invoices/statements to clients whenever you want to. It has the facility to assign drivers to journeys and so can be used by small taxi firms instead of having to invest in very expensive enterprise level software with more functions than a small firm requires. PHATsoft is bespoke software specifically for the self-employed professional driver and is affordably priced.

A significant element of PHATsoft that is not readily apparent is the in-biult functionality to send the data to an accountant. The program allows you to choose from a list of accountants or to specify your own. When you're ready at the press of a button your data is sent in a handy spreadsheet format to your accountant. He'll love it. All of the input work is done for him so he can concentrate on preparing accurate accounts and spend more time reducing your tax bill.

PHATsoft also has in-built back-up and restore facilities to minimise the loss of data.

DataQuick is an online solution for the driver who does not need to send out accounts to customers. It is a very simple way of recording cash income and expenditure, akin to the QuickInput screen in PHATsoft. DataQuick allows you share your data, in real time, with someone else, like your accountant. He can download the data when he needs to, thus removing the need for him to spend countless hours typing in your information. As with PHATsoft, he can concentrate on preparing accurate accounts and spend more time reducing your tax bill.

DataQuick costs less than £1 per week for an annual license. 

Author: Paul Guillou, Accountant and software architect for PHATsoft and DataQuick.