As a landscaper, you might feel you don't have much too much of a say in managing the landscaping business accounts. Your top priority can be landscaping and improving the services to enhance your customer’s experience. However, landscaping business accounts hold a high significance for your business as they can help you make the right decisions.
While making the lawns greener and shiner for your customers is important, accounting deserves the same time and attention.
And don't worry, since you won't have to go through college again to take accounting classes. If you can take a grasp of some basic accounting concepts, it can help you make the most out of your accounting departments. So, below are tips you can follow for bookkeeping and accounting.
How to Manage Your Landscaping Business Accounts Efficiently?
No rocket science goes into managing your business accounts. If there is anything regarding your landscaping business accounts you don't understand or are unsure about, you can turn to your accounting team for assistance.
Let's go over the tips you can use to make the most out of the landscaping accounting department.
1. Pick an Accounting Method and Stick to it
Taxes are the most critical aspect of your personal and business life. Your business needs to choose the accounting method which fits its needs for submitting tax returns from the following:
- Accrual Basis
- Cash Basis
Many businesses opt to go on a cash basis for the tax returns as it is easy to track the expense you have paid and the earnings you receive. On the other hand, an accrual basis accounting method has different tactic since it counts income and expenses once you incur them.
It requires you to put in a little extra time, but the accrual accounting method will give you a comprehensive and accurate overview of your landscaping business accounts. Whichever option you choose, you should discuss with a professional Certified Public Accountant (CPA).
Consulting with a CPA or a tax consultant will help you make the best choice for your business. They will let you know about all the tax breaks and the technicalities involved in the accounting methods. Moreover, they can also let you know how any future changes can impact your taxation.
2. Understand Financial Statements
Before taking on a landscaping project, you go over all the details to ensure you get a perfect look for the garden. You will discuss with your clients their expectations, go over the material you need, and discuss with your team to plan the project before you start.
The same is the case when understanding your financial statement. These financial statements can help you understand the business needs and requirements. You can use it to come up with an outline for the growth of your business in the short and the long run.
Here are the three financial statements you need to understand.
Statement of Financial Position
Statement of financial position (SOFP) is also known as a balance sheet. It tells you about all the items that your business owns. It also gives you the amount of money you owe or the different liabilities you have and the total equity of your landscaping business.
The main objective of the income statement is to show how much profit your business is making or the loss it is incurring. It also gives you an idea about the expenses of your business.
Cash Flow Statement
If you want to find where your business is receiving money and how much is going out, you need to turn to cash flow statements. In case you want to expand your business operations, cash flow statements will play a vital role as they show how you manage your funds.
3. Automate the Entire Accounting System
Accounting can be as easy for you as landscaping if you incorporate a robust and user-friendly system. It will simplify the bookkeeping and accounting process for the entire business. Utilizing accounting software can help you in many ways, such as:
- Entering all the data into its system automatically
- Helpful in handling your cash flow
- Managing your outstanding invoices
- Tracking bookkeeping and other accounting transactions
These are just some benefits your business can enjoy if you find a digital solution to cater to accounting needs. Most importantly, it will help you streamline the process for recording transactions. You can enter the transactions in the system instead of recording them manually.
It will save you time and money, which you can divert towards the essential aspects of your landscaping business. You can spend more time improving the customer's gardening than sorting your bookkeeping and other accounting transactions.
4. Keep an Eye on Accounts Everyday
Landscaping requires you to water the plants and the grass every day to retain their freshness and shine. There is nothing much different about accounting as well since you will have to keep an eye on it daily. It will ensure you avoid any mistakes that can become a problem at the end of the accounting year.
Landscaping companies must go over their business accounts daily to ensure everything is accurate and organized. You don't want to go through paperwork or other records to find mistakes at the last moment that lead towards accounts reconciliation.
Though you can take the services of a tax consultant or accountant to sort out your taxes, it requires more than that. Looking and organizing your bookkeeping will help you make the most out of your accounting department.
5. Track your Expenses
The most important thing to consider for a landscaping business is the expenses you incur on each project. You need to have a complete tracking system to note down each expense. High expenses can impact the profitability of your business.
Therefore, keeping a record of the following items is imperative:
- Equipment or machinery you purchase for any particular project
- Equipment repairs
- Old tax returns
- Permit expenditure for client’s properties
- Renting office and storage area
- Time spend on each project
- Travel expenses
- W2 and 1099 forms
Accounting is the backbone for any business as it helps you make the right decision and create a plan for the future. You can use the various accounting tools to streamline the entire process for you and make the most out of it.
One thing you need to keep in mind is that your landscaping business accounts should be managed daily. It will ensure there are no discrepancies and help you in understanding your business finances much more accurately and correctly.
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