Bookkeeper for Private Patrol Companies

How does money flow in a security company?

Your revenue comes from repeating invoices for static post hours, patrol routes billed weekly, and event work. Each of those streams has its own rate and its own payment schedule. Cash arrives at a different time than the invoices go out. Whether it is a contract that pays in 15 or 30 days, or a big client you let slide to 60, the books need to show the sale when the service is performed, not when the payment hits your account.

That delay between billing and cash is the hardest thing to manage in a patrol business. The bookkeeper you work with has to reconcile each invoice to the payment that eventually shows it, so you always know what you are actually owed.

What is eating away the profit margin in my contract?

Labor is the biggest cost, and it is not only what you pay the guard for the hour they stand. Add 6.2 percent employer Social Security on top of that wage, further workers' comp, insurance, uniforms, radios, vehicle fuel. A lot of patrol operators calculate a bid using only the hourly rate, then wonder why the margin at the end of the quarter is never as high as they thought. Trade blogs say aim for a gross margin of 20 to 30 percent per post, but that number only holds if the overhead is skillfully spread out across the contract.

Your books should break that cost out: what part of your monthly cost is the guard on a specific shift, what part is payroll tax, what is the insurance you need to buy to be licensed to the state. When every contract carries its own share of these costs, the margin is real, not a guess.

What bookkeeping mistakes do patrol companies repeat?

The most expensive one is a mismatch between the guard's time sheet and the hours you invoice. The guard works 42 hours but the post is billed for 40, you purchase four hours of labor out of your own pocket. Or the opposite, you overbill, which shows a contract profitable when it is not, and sets you up for a dispute after the client gets their audit. Record hours correctly, and reconcile them to the payroll data every week.

Other common slipped ups: paying the annual insurance as one line instead of dividing it across eight months, letting big invoices sit at 60 or 90 days unpaid, and putting personal vehicle or fuel cost into the company account without separating out. These are the things a monthly bookkeeping pass sees and cleans up before they throw the whole year's numbers off.

Should I track each separate contract in my books?

If you have more than one site and you group all site income together, you cannot know which post is worth keeping. A commercial site at 22 an hour might be bleeding your margin after you pay the two guards and the overnight shift, while a dollar roster at 28 an hour carries the whole rent. The only way to see that clearly is to classify each contract as its own job in the general ledger. Revenue, labor, per-shift equipment, and the contract's share of the insurance, all land against that contract's number.

That means it is routine to get a profit report per contract at the end of a month. One floats, another heads, and you know exactly what to reprice, what to push back on, and what to let go.

What numbers tell me if my contract is actually profitable?

Look first at a profit and loss statement that breaks out labor costs separately from overhead. Then go deeper: divide the contract's revenue by its billed hours so you know your blended rate per hour. Do the same for the actual cost per hour, that includes payroll burden, comp and contract supplies. The difference between those two numbers, multiplied by the hours a month, is what you are actually putting in your pocket off that contract.

The third place to watch is cash. List every unpaid invoice that is more than 30 days old, and know exactly which client is holding it. A security company that lets the big account pay slow is running itself on an unpaid line of credit.

How do my books help me price the next patrol or post?

When you have a tracked at your actual rates on your side of a contract, you have a real number to put in the next proposal. You can say: this route here runs 1,600 hours a month, the guard cost and payroll tax is this much and then my insurance and vehicle overhead is a definite share a added to it. That's a price that survives a year of that post, not just as cheap number for a bid that disappears after month two. Your bookkeeping should give you that labor rate per hour and the overhead percentage to apply to it since you have ever done a close of the books.