Essential Bookkeeping Tips for Home Service Businesses

Track Labor and Material Costs Accurately

Labor and materials are often the largest expenses for home service companies. Keeping these costs organized ensures accurate pricing and helps maintain healthy profit margins.

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How Ledge Helps:
We categorize every job’s material and labor costs, providing clarity in your monthly financials. For example:

• $5,000 for materials like HVAC units, electrical supplies, or cleaning products.
• $12,000 for technician wages to cover time spent on installations or repairs.
• $1,000 for transportation costs such as fuel and vehicle maintenance.

This level of detail ensures you know where every dollar goes, helping you adjust pricing and manage costs effectively.

Simplify Invoicing and Cash Flow

Late payments can hurt your cash flow, leaving you scrambling to cover expenses. A well-organized invoicing system ensures timely payments and reduces administrative hassle.

How Ledge Helps:
We set up automated invoicing systems by integrating tools like Jobber, Serviceminder, Housecall Pro, or ServiceTitan with QuickBooks Online, making it easier for you to track and collect payments.

Benefits:

• Faster payments.
• Accurate tracking of overdue invoices.
• Improved cash flow for smoother operations.

Understand Payroll Breakdown

Managing payroll for a home service business can get complicated with technicians, office staff, and seasonal or subcontracted workers. Understanding how much you’re paying each group is key to controlling costs.

How Ledge Helps:
While we don’t process payroll directly, we break down wages and taxes by role in your monthly financials. Here’s an example:

• Technicians: $7,000.
• Office Staff: $2,500.
• Subcontractors: $3,000.

This clarity allows you to adjust staffing, manage costs, and make better hiring decisions.

Maximize Tax Deductions

Home service businesses have access to many tax deductions, but keeping track of them can be overwhelming. Missing deductions could mean leaving money on the table.

How Ledge Helps:
We identify and track all tax-deductible expenses, ensuring you save as much as possible.

Common Deductions Include:

• Vehicle expenses: Mileage, maintenance, and fuel.
• Equipment purchases: Tools, machinery, and supplies.
• Advertising costs: Marketing, lead generation, and website expenses.
• Home office deductions: If applicable.

When tax season arrives, you’ll be fully prepared with organized records.

Practical Tips for Home Service Business Owners

Here are a few tips we recommend based on our work with home service companies:

1. Separate Personal and Business Accounts: Keep your finances clean by using dedicated accounts.
2. Use Invoicing Tools: Tools like Jobber or Housecall Pro simplify billing and ensure error-free invoices.
3. Automate Payroll: Use tools like Gusto for accurate and compliant payroll processing.
4. Review Expenses Monthly: Regularly assess your expenses to identify cost-saving opportunities.

Take Control of Your Home Service Business Financials

At Ledge, we specialize in bookkeeping solutions tailored to home service companies. From tracking labor and material costs to ensuring tax compliance, our services are designed to give you financial clarity and peace of mind.

Book a Free Consultation today and see how we can help your home service business thrive!