Home service contracting businesses have to attend to the paperwork while managing jobs across sites. Home service contractors can balance back office needs with customer demand to successfully run their small business.
Begin with a Budget
A budget allows you to estimate and track your expenses and profit. Create and follow a budget at the start of the year. Begin your small business budget with:
- An estimate of revenue.
- Incorporate expected changes into your sales projection.
- Estimate expenses using the annual costs on your P&L statement and adjust for upcoming changes.
- Project profits by taking your estimated revenue and deducting estimated costs.
Use your budget to track and manage expectations and growth year after year.
Manage Your Expenses
Home service contractors, such as HVAC technicians, electricians, plumbers and more, need to track and manage various expenses. Some expenses are directly related to offering a service or creating a product and are known as Cost of Goods Sold (COGS). Merchant fees, labor, materials and cost or parts can all fall within the scope of COGS.
To get an accurate calculation of the Gross Profit of a business, it is necessary to properly track and deduct your COGS. This will help you as a home service based small business set fair prices and be more accurate in forecasting sales goals.
Maintain Your Cash Flow
Home service contractors are busy servicing their clients. Invoicing and tracking of services rendered, often pile up in the meantime. Longer periods taken to invoice and follow-up with payment from services can interfere with timely payments. As a small business, you need to maintain a healthy cash flow to cover your payroll and grow your business.
Cloud technologies make it possible to send and manage customer invoices. You can actively service customers on the go, email invoices and see when the content is viewed and when due dates are coming up.
Take All Available Tax Deductions
Retain as much of your revenue as possible by understanding IRS requirements when maxing out applicable tax deductions. Home service contractors can avail themselves of client gift costs, the home office deduction, and mileage deduction. Mobile apps and cloud storage make it possible for staff to track mileage and take photos of receipts that can be expensed.
Shockley Bookkeeping and Tax Services helps small business owners with their payroll and bookkeeping needs. Small business owners that want to improve the financial performance of their business and need a reliable bookkeeping solution offering quality reporting turn to the professional and meticulous experts at Shockley Bookkeeping and Tax Services in Broken Arrow, OK. Contact a payroll and bookkeeping expert at (918) 615-8380 to manage your small business financial needs.