Bookkeeper for Handyman Businesses

How do I get paid and how do I record it?

You get paid in three ways: by a flat rate, by an hourly rate, or by time-and-materials. Your books need to keep these three types separate.

Most handyman jobs mix these. If you replace a faucet for a flat $200, that's one job. If you bill a project by the hour instead, each hour's cost lands in the books. You don't review what you did for the week at a category level; you see each job at the job level. So it helps to record each job against the fee structure it was priced under.

• Keep a separate income line for flat, hourly, and time-and-materials jobs.
• Record every cash payment, even if it never goes through a card reader.
• Put deposits into a liability account and move the amount to income the month you finish the job.

What are the biggest costs I need to track?

Your biggest recurring costs are the vehicle, the insurance, the license, and every material you buy for a particular job.

The vehicle is usually the largest. You drive it to job sites, carry tools in it, and the running costs are a legitimate business expense. You can track mileage or the actual costs (fuel, oil, repairs, registration) but you have to pick one method and use it consistently. Tools are the second. A $50 drill is an expense in the year you buy it, while a $2,000 machine should be put on the balance sheet and depreciated. General liability insurance and your state or local license are the fixed overhead of staying in business. Losing that license averages $20–$400 a year, not huge next to the vehicle, but it's not a place to skip.

• Vehicle: track mileage or actual costs, never both.
• Tools: expensed under a single account, or capitalized if you use them for more than a year.
• Insurance and licensing: fixed monthly or annual costs.
• Job materials: charge from the day, not from a personal account.

What mistakes do handymen make most often?

The two most common are losing track of cash payments and mixing personal and business money in the same account.

If you finish a cash job and never write it down, the money disappears. No bank feed will bring it back, and the next time you look at the books it looks like you made $200 less that month. The same mixture happens in the other direction: using a business card for a personal purchase, so at the end you can't tell what the company paid for. Third is the mileage log. You know you drive, but if you do not have a map you do not have a clear deduction.

What do I need to track for each job?

Each job needs its own revenue, its own material cost, and its own labor cost, so you can see which jobs you want to book again.

A flat $400 job can take four hours and a time-and-materials $500 job can eat your whole day. Without per-job numbers, you will just feel it. The job sheet should list the hours you spent, the receipts you purchased, and the invoice you sent the client. If you bring on a helper, the hours you pay them also get charged to the job you work on. That is how you will see what to charge and which jobs to keep.

• Log your start and stop times.
• Keep every material receipt, paper or photo.
• Put the job's hours and materials on the invoice and sync them into the books.

Which reports should I actually look at?

The two reports you need to run are the profit and loss and the job profit report. Cash balance is the third number that tells you whether you can pay the next supplier.

The profit and loss shows you current net income and your gross margins by account. It groups revenue and costs by category, and the bottom line tells you whether you are in the green. But it hides which job actually made you the money. The job profit report breaks each job's revenue minus the materials and labor assigned to it, giving you the gross margin on every work order. If a job pays $900 and the material plus hours work out to $600, that's a $300 margin. The cash balance tells you if the money is actually sitting in the bank, because a handyman can have $20,000 on the statement but not have enough in cash to buy supplies next week if clients are slow-paying.

What decisions should my books support?

Your books should tell you whether to raise your hourly, whether to hire, and whether you can afford a bigger truck or a new saw.

With the numbers in front of you, you can compare your rate to your true cost of an hour, which is materials, tools, and the wear on yourself. If you look at the gross margin on the most common jobs, you see which is a job to push harder and which to turn away. If you see a full calendar and steady profit for the last six months, the books give you the confidence to estimate the cost of a part-time helper. And when you look at the repair and replacement cost of your equipment over time, you can tell whether a new $3,000 drill will pay for itself in the jobs it lets you take. A handyman who does not own the numbers ends up pricing blindly. A clean set of books puts those decisions on the desk.