Lawn care business advice from an accountant.

Bookkeeping is not something that seems to be an easy concept to grasp for most new lawn care business owners. Sure everyone understands they need to make a profit but how do you figure that out? How do you know from day to day if you are making money or losing it? Trying to keep it all figured out in your head won’t get you past your few first days of operation and then you will totally get yourself confused. Thankfully an accountant shared with us some simple bookkeeping steps, on the Gopher Lawn Care Business Forum, to help new business owners get started on the right foot.

She wrote “I recently started my own accounting and bookkeeping service to support the needs of small business owners in the area. Being a small business owner myself, I know how hard it can be. It is a LOT of work! I have not always been an entrepreneur, but got started out of pure anxiousness!

Before I had kids I worked as a professional accountant. Then stayed home once I had my first baby. I quickly became VERY anxious and really missed doing accounting. But, I wanted to be the primary care taker of the kids, so I had to come up with something that would allow me to do that, but still practice accounting! Eventually, my small accounting firm was born and here I am

To help those start up lawn care businesses that have no previous business experience, my best advice is to make sure you are doing something you LOVE. It takes SO much time and energy to create a business, I think it has to be something that you are passionate about. Otherwise, it just isn’t fun or sustainable.

For me, I found it to be an easy transition. I’ve had years of business related schooling, so I have always had it on mind. The hardest of the transition for me was that while I am a stay-at-home mom, I work (at the business) MANY more hours than I would if I had an outside job. I haven’t actually tracked my hours…I don’t even want to know!

The biggest problem that I see new business owners have (in regards to bookkeeping) is simply staying up to date with their paper work. My best advice is just to keep up and stay organized. Find a system that works for you. You may need to tweak it as you go, but having a plan from the start will help a lot!

You may want to take a look at the schedule c that you will be filing at tax time (if you are a sole proprietor). That will give you an idea of the expense categories.

To me ‘paper work’ includes all expense and income details. When a new client comes to me (or you just want to keep yourself organized!) I would want to see the following:

  • Expense info *with a note from you about what the purchase was for.
  • Bank statements.
  • Credit card statements.
  • Invoices (or some form of sales info).

From this information a Profit & Loss report can be created. A P&L will show you how much you are making (KEY information to have!) and how much you are spending.

For a small startup to be successful, a P&L is MANDATORY! If you don’t know what you are spending vs. what you are making, you can’t make sound financial business decisions.

I would suggest the P&L be updated monthly. For some very small businesses it doesn’t need to be that often. But I wouldn’t want to go longer than quarterly. Like I said above, if you don’t know your financial status it is hard to make good decisions.

P&L’s should be broken down to show profits and expenses by category, for example:

+Income:

-Expenses:

=NET PROFIT

If you have multiple crews you may want to track the income and expenses per crew, as a secondary reporting option. I think that it is a good idea to do so. But, you will want P&L for the company as a whole first and foremost.

Another issue a new small business owner may not be aware of is what they need to collect sales tax on. Sales tax is one of the necessary evils of doing business. Each state has their own rules, making it a convoluted topic.

The best place to find information about your state is to visit that tax authority’s website. If you can’t find the answers to your questions on your state’s site, don’t hesitate to call them directly. They should have someone available to talk to directly.”

A lawn care business owner said “I have our company broken into four divisions all the records are input daily. I know at any given time where the company stands, how profitable each crew or division is.

I would probably be considered a medium sized lawn care company and it only takes a few moments each morning over coffee to input expenses.  I have an assistant who handles billing/payroll so that is not an issue for me.

Inputting financial information daily allows me to identify potential issues, performance and profitability so I don’t have to guess.”

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A rebellious teenagers guide to starting a landscaping & lawn care business
The GopherHaul Lawn Care Business Show Episode Guide.
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