Unless the company you do courier work for operates “self-billing” (ie they produce your invoice for you and send it to you with your money) you’ll need a simple way of invoicing for the work you do. You can start with a simple invoice book from a stationer, or just use MS Word or Excel (Google for invoice templates to use), or use a simple online invoicing system as provided by websites like www.mtvan.com or www.tiriazo.com.
When choosing an invoicing system, the simpler the better. What you want is something simple, cheap and effective.
Invoice promptly, as this means you’ll get your money more quickly, and don’t be afraid to call to remind that payment is due. Payment terms should be shown on the invoice. They should be the same terms you agreed when taking on the work.
You should find yourself a local accountant, and take advice at the outset. This advice should cover all financial, tax, and legal aspects of your plan to become an owner-driver courier.
Ask your accountant about becoming VAT registered. Most owner-drivers choose not to, as it’s a lot of hassle, and to start with you won’t have to. If you decide to later, you can get some of the VAT back that you have already paid out.
Your accountant may recommend that you set up in business as a sole trader, but there may be sound tax reasons for setting up a company. Setting up a company also means that you protect yourself from some financial risks.
Definitely something to get professional advice about.
Your accountant will also advise you about the basic record keeping you’ll need to do. You should also seek his/her professional advice on the basics of invoicing and of “self billing”, as it’s an arrangement favoured by established courier companies.
You should also ask for advice about the rules governing your “self employed” status.
Doing courier work for more than one courier company:
So far in these article, we’ve talked about how to make the most of becoming an owner-driver courier, with a single courier company as your customer. There’s a good living to be made if you approach it in the right way, and it has the advantage of being a fairly fun and risk-free enterprise, especially if you insure yourself properly.
The next step could be to work for more than one courier company. The benefits of doing this, are that you are more free to set your own prices, your times of work and availability, and your payment terms.
The difference is, that instead of being one of the regular daily couriers used by a courier company, you offer yourself as being available as and when they need you. This helps the courier company cover their busy times. In return, the courier company accepts that occasionally you may not be available, as someone else may have booked you.
Experience shows that although it’s worth speaking to every courier company you can find, in every town and city you find yourself in, the reality is that people usually settle down to working for no more than ten courier companies. If you take on too many, there are just too many times when you have to say “no sorry”, so they just stop calling you.
You can add to your list of customers, and help fill your van in your own quiet times by using a courier work exchange such as www.mtvan.com.
You have to be quite organised, as the admin starts getting more complicated, as you have to fit in with different systems for different companies, such as invoicing and payment terms.
You may suddenly want to call yourself something, such as “John Smith Courier Services”, now that you are offering your services to several customers. Make sure it doesn’t make you seem too much like a competitor to your courier company customers, or you risk putting them off. This also applies to whether you get your van sign-written. Best to leave it blank, or if you really want to put your name on it, at least keep it very low key.
The next step is to look at getting some end-user customers of your own.
Up to now, courier companies you have worked for have protected you from most of the risks of courier work. The risk of having high overheads, of not being paid by the customers, of paying out to the customers for damaged or lost parcels, of paying compensation for negligence etc, all fall mainly on the courier company, not on the individual courier. As longs as you have the right insurance, as long as you get paid quickly by the courier company, and as long as you have enough work, being an owner-driver can be a relatively risk-free business.
Taking on the extra risks of working for end-users, together with the workload of the invoicing and collecting the money, is the part they play in the courier market. In return they charge their “end user” customers higher prices than they pay you for your services.
So if you want to make even more money, that’s where you have to go.
© 2009 Tim Gilbert – All rights reserved.