7 Tips for Organising Finances in Your Lawn Care Business
There are many reasons why people decide that a business in lawn care is right for them. You get to choose your hours, work outside, and meet new people. But one thing that holds many people back is the idea that small business finances are complicated.
Fortunately, they don’t have to be. Here are a few helpful tips for organising finances in your lawn care business. You’ll soon realise that it’s easier than you first thought!
Separate Your Finances
Trying to distinguish your personal expenditure from your business expenditure can be hard work when you’re using the same bank account. To keep your tax records manageable, open a business banking account that you will use purely for business purposes.
For everything else, like your mortgage and personal items, use a personal bank account. You may even like to have two different credit and debit cards to avoid accidentally spending personal funds on a business account or vice versa.
Ask for Help
When you are a franchise owner working for a reputable lawn care company like Crewcut, you can expect a certain level of help to ensure you understand how to manage your finances. They can advise you on the best way to manage your accounts and even encourage you to hire an accountant.
Fortunately, not only can accountants help you make sense of your books, but there is also plenty of online software available that’s easy to navigate. Whether you’ve got business management experience or not, you may be surprised at just how straightforward it can be to organise your finances.
Establish a Budget
Every year, a lawn care business owner should revise their budget to ensure their business remains profitable. Work out the costs of fuel, equipment, servicing, and any other expenses that pop up.
It even pays to look at areas you can save money and whether you need to put up your prices to cover costs. Budgeting is a core part of making sure your business is in the most profitable position possible.
Creating a budget is reasonably straightforward. Simply review your revenue and fixed expenses, consider variable expenses and unexpected costs, and compile it in a budget format, such as on Microsoft Excel. It then becomes simpler to revisit it annually.
Get Familiar with Your Chart of Accounts
Your chart of accounts, which is viewable in most accounting software, allows you to understand your financial position. Two things, in particular, provide a snapshot of this information, and these are Profit and Loss Statement (P/L) and Balance Sheet (B/S).
The P/L shows you the profit or loss you made in a specific period, while the B/S lays out the things you own, what you owe, and how much equity you have in your business.
This information can prove useful for determining how you made a profit or loss, alongside how your liabilities, equity, and assets, are categorised.
It might take some time to get to grips with accounting concepts and tracking your financial information accurately, but you will surely find that there are always people available to lend a helping hand.
Stay Up to Date
It’s too easy to get into the habit of putting off doing your bookwork after a hard day of lawn mowing. You may not feel like filling out your expenses or writing up invoices right away, but it can be easier if you do.
The more you stay on top of your bookwork, the easier it is to stay on top of it. Make sure you enter bank statements, credit card statements, expense info, and invoices with sales information to form an accurate profit and loss statement.
Be Aware of Changes
Every now and again, Inland Revenue (Te Tari Taake) makes changes to its requirements for how businesses need to report on their finances. You might be tempted to delete any email newsletter they send through because it’s not relevant, but it just might be.
Pay attention to new information they send through, and even follow their Facebook page to find out if anything new is coming up. You won’t always know when a significant change is going to affect how you operate your business.
Do It Online
Many lawn care business operators get into the business because they want to spend more time outside. You may have realised that the average business is becoming too computer-based, and you don’t want to spend all your time strapped to a computer chair.
While a lawn care business allows you to do just that – stay outside – it does require some computer work. As tempting as it can be to write everything down out in the field and compile your notes and finances manually, refrain from doing so. It’s easy to lose financial documents and notes, and you can end up with an inconsistent paper trail.
Certain lawn business software allows you to digitise your bookwork. If you aren’t able to manage your books and finances online, it may even be worth considering hiring someone to do it for you.
Easy Steps to Become a Lawn Care Business Owner
As you can see, there are just several steps involved in making sure you can organise your lawn care business finances. As complicated as it might seem, it can be straightforward with a bit of education.
When the time comes to make a leap into lawn care, start doing your homework. The earlier you get to grips with your financial requirements, the smoother your transition into daily business will be.