To run a successful plumbing business you need to know your trade and how to manage the business of providing plumbing services. Bookkeeping for plumbers is not just about tallying the numbers and showing how much profit (or loss) you have. Your bookkeeping should help you identify opportunities to exploit and problems to fix. When you use bookkeeping software like QuickBooks you will be able to track your inventory, labor costs, unpaid bills, and other expenses. Whether you choose to handle all of your bookkeeping in house or use online bookkeeping services, professional bookkeeping for plumbers will make the difference between business survival and business success.
The main expenses in your plumbing business are materials and labor. You want to make certain that you are not losing money and, preferably, making a profit on the materials that you use on your jobs. A good bookkeeping setup will tell you how much you are paying for each material item, what job it gets used on, how much you charged for it, how long it sat on the shelf, and your overhead for having the item in stock. When you employ a plumber to work for you, you need to be charging enough for their time for you to make a profit or you might as well be doing the jobs yourself. Bookkeeping for plumbers will help you track the efficiency of your employees and subcontractors to make certain that you are getting full value for every cent of your payroll. We can show you how to set up a time tracking app to make overseeing your workers and your payroll operations more efficient.
There are two parts to this job. The first is deciding what business entity to set up for your plumbing business. At Exigo Business Solutions we provide accounting services for small business. You can outsource your bookkeeping to us, save money for doing the task. And, you can benefit from our accounting expertise. Setting up your business as a sole proprietorship, a partnership, a corporation, an LLC, or an S Corp can make a big difference in your tax liabilities. The second part of taxes is the yearly prep which starts from day one and not at the end of the year. When we do your taxes as well as your bookkeeping the job will be done accurately and you will pay the legal minimum each year.
You need to pay taxes on what you make every year. And, you are allowed to deduct every cent for the expenses that you have in doing that work. It is important to know exactly what you can and what you cannot deduct. And, it is important to have that data integrated into your bookkeeping software. Rent, salaries, and tools are generally easy to keep track of. Food, communications, and travel expenses are usually more complicated. When we help you set up a system for tracking your deductions, we aim to give you the largest tax benefit without any risk of a tax audit of your business.
Managing your cash flow correctly is a major part of the success of your plumbing business. This includes setting up payments for installments on your taxes so that you are not hit with a huge expense at the end of the year and are not cash poor throughout the year.
We go into business with the idea of working for ourselves and making a profit in the process. Unfortunately, in plumbing and any other type of business, profits can be elusive. This situation does not have to be the case! At Exigo Business Solutions we commonly introduce our clients to a business system called Profit First. Profit First makes profit a habit and not something that you hope for each month. With this approach you will improve your budgeting and cash flow management and you will track down and eliminate hidden expenses. But, first of all, you will rewrite the standard accounting formula so that it no longer takes revenue, subtracts expenses and gives you profit (or loss). Rather you will take revenue and subtract the profit you take each month. Then you will manage cash flow to handle any shortfalls and attack hidden expenses and budgeting in order to balance the books.
When you started out in your plumbing business, you handled every detail. And, as your business grew you delegated various tasks. Unless you set up efficient plumbing business systems, you are either spending too much time on details or missing things that are hurting you. Many small business owners, plumbing included, spend too much time dealing with trivial issues that never seem to get fixed and end up costing too much money as well. This “survival trap” is caused by problems at the base of the business hierarchy of needs starting with sales, profits, and efficiency. At Exigo Business Solutions we work with some of our clients using our skills as Fix This Next coaches. With the Fix This Next approach we help you identify the basic problems that are constantly taking your time and costing money. Then we help you fix those problems and set up efficient plumbing business systems to make certain that those problems remain under control.
Bookkeeping for plumbers has features unique to the plumbing business and features that are seen across all businesses. Work with us at Exigo Business Solutions and get your bookkeeping under control and your business systems operating at peak efficiency. Contact us for help.
