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With landscaping on your mind, you are likely not thinking about bookkeeping and accounting daily. Instead, you are thinking of proper lawn care to keep your customers happy.
Landscapers should be thinking of their accounting and bookkeeping more than just on Tax Day on April 15th.
For better organization of your project finances, you should utilize proper bookkeeping and accounting. It will provide financial reports to better understand the money coming in and out of your business. Adequate accounting can also help you identify trends in the industry of landscaping.
Tracking your finances gives you the power of knowledge. Knowledge is power when making educated decisions to guide your landscaping business towards future growth.
Landscapers know how important it is to water a lawn daily. Think of bookkeeping and accounting as tasks that help grow your small business every day and over a long period.
Landscaping companies need to take a little time every day to keep track of their books and organize the paperwork to ensure all expenses and invoices are accurate.
You might think that hiring an accountant for tax season is enough accounting for the year. However, that would be like fertilizing or watering once a year. Doing a litter bit every day will help you better understand how to grow your business and anticipate problems.
Your landscaping company has two different accounting methods to choose from for submitting your tax returns, accrual basis and cash basis.
The easy accounting method for many companies is cash basis. The cash basis method will track expenses that are paid out and when your income is received.
Accrual basis accounting takes a slightly different approach by counting money and expenses when they are earned. This accounting method will take more involvement from you, but it will give you a clearer picture of your business’s future.
Before choosing an accounting method for your tax return, we recommend speaking to a CPA. A well-trained CPA will help you make an educated decision on which approach makes the most financial sense for your business. Something to take into consideration is which method provides the best tax breaks available for your industry.
Many landscape companies find that bookkeeping is a challenging task. Designing systems that are simple to follow will help your company keep up with its accounting.
Accounting software can be a tool you utilize to make it easier to keep up with tracking your accounting information. The software will manage your financial information by inputting it into its system automatically. The software can help with managing your cash flow, tracking bookkeeping, and managing your outstanding invoices.
Many small business owners of landscaping companies find it useful to hire a professional to aid them in their bookkeeping management. Hiring someone to track your bookkeeping allows the business owner to focus more on their customers’ work.
Without a strategy on how to take care of your business’s books, your business will not follow proper accounting procedures.
When it comes time to file your taxes, you will understand how important it was to track your transactions. Below are some examples of documents to keep track of.
There are only so many hours of daylight every day for a landscaping business to make an impact. You likely do not have the time to spend hours staring at a spreadsheet looking at your payroll, inventory, and invoices.
Setting up small daily habits around using accounting software will give you more time to landscape.
When going into a landscaping project, would you start it blind? Of course not; you have a plan in place. You need so much sod, rock, woodchips, and plants to complete your project. Without a plan, you would have no idea how much it would cost or how much time it would take.
Your financial statements will work as a plan or outline for your business now and how you can grow into the future.
Using your balance sheet will show you all the items that your business owns, owes, and the value of owner investments. The balance sheet shows you these values at specific times.
Income statements will show you how profitable your company has been over a reported period. It will show your revenue minus your expenses and losses.
Your cash flow statement is a statement that records the cash your business has coming in and out of your accounts. If you ever want to scale your landscaping business up, investors will want this statement to look at how you manage your money.
Many landscapers start out doing their own bookkeeping since it is less expensive than hiring a professional.
As your business grows, you will need to decide if you can afford to spend time indoors entering numbers when you could be outside focusing on lawn care. Hiring a professional bookkeeper to track the money coming in and out of your business will help you focus on customer service solutions and running the parts of your business you are an expert in.
Bringing in a CPA will help you with your tax filings. They will also help you identify trends through your financial statements. A CPA will give you the best information to find solutions to your financial problems before they become problems.
When operating a landscaping company, it can be challenging to keep up on the books. Up until this point, creating beautiful landscaping projects for your customers was probably the first thing on your mind. The last thing on your mind was likely to keep accurate books every day.
A dedicated bookkeeper can aid you in tracking all of the money coming in and out of your business. They will help you keep track of your weekly and monthly bookkeeping needs.
When thinking about your financial numbers in landscaping terms, you quickly see how important they are to your small business’s long-term success. Fertilizing and watering grass is essential to a healthy lawn. Just as keeping accurate books sets you up for an easy tax season and gives you knowledge on how to scale your business up in the future.