Handyman business bookkeeping: lots of small jobs, done right

A handyman business has an unusual bookkeeping problem: enormous volume for its size.

A commercial contractor might have forty transactions a month on ten jobs. A busy handyman can have four hundred on a hundred jobs — a hardware store run for almost every one of them, a card payment or a check for each, small invoices to property managers, parking, tolls. None of it is complicated. There is just a great deal of it, and it arrives at the end of a long day.

So the question for handyman books is not how to handle something difficult. It is how to handle a lot of small things without it eating your evenings — and still come out knowing which work pays.

Capture receipts at the counter

The single most useful habit: photograph every receipt at the store, with the job name written on it or said in the note. Ten seconds at the counter. Impossible to reconstruct three weeks later when a card statement shows six trips to the same store on the same day.

Pair that with a bank feed into your accounting software and most of the bookkeeping becomes matching rather than entering. See lost receipts and missing records for what to do when the habit slips.

Keep business money in one place

A separate business account and a separate card, with nothing personal through either. For a one-person business this is the difference between books that take an hour a week and books that take a weekend a month, because every mixed transaction has to be investigated. See separating business and personal money.

Know what an hour really costs

Handyman pricing is usually hourly, per job, or a mix with a minimum charge. Whichever you use, it has to cover more than the time on site:

• Drive time between jobs, which is paid in effort even when it is not billed
• Store runs, which on small jobs can take as long as the job
• The van and tools — fuel, insurance, maintenance, replacement
• Your own pay, as a proper wage, before any profit

Most handyman businesses that struggle are not short of work. They are charging a rate that covers the hours on site and nothing else. The true hourly cost calculator works out what an hour actually has to earn, and the service call price calculator turns it into a minimum charge.

Materials: pass-through or profit?

On small jobs, materials are often charged at cost, or forgotten entirely when the invoice is written that evening. Decide your policy — at cost, at cost plus a handling percentage, or included in a job price — and apply it consistently. Then check the books: materials purchased against materials billed, month by month. A gap between the two is money you spent and never recovered.

Property managers and repeat customers

Property managers and landlords are often the steadiest source of handyman work, and also the slowest payers — many small invoices, approval chains, and net terms. Track receivables by customer and chase on a schedule; a large portfolio of small unpaid invoices adds up faster than one big one. See when a customer will not pay.

It is also worth knowing what each property manager is actually worth: revenue, margin, and how long they take to pay. The best-paying customer and the busiest customer are frequently different people.

Licensing and job size

Many states limit the size or type of work that can be done without a contractor’s license, and the limits vary a great deal. Keep job values visible in your books by job, so you can see at a glance whether any work is approaching your state’s threshold. Check your own state’s rules rather than relying on what applies elsewhere.

When to get help

A handyman business usually reaches the point where the bookkeeping is costing more in evenings than it would in fees well before the owner notices. If receipts are piling up and the bank account has not been reconciled in months, see should I do my own bookkeeping — and bookkeeping when it is just you and a truck for the smallest sensible setup.

Related

• What you should charge for a service call
• Mileage or actual expenses? Vehicle costs
• Quarterly estimated taxes
• Garage door company bookkeeping
• Appliance repair bookkeeping: two trips, one job

General information, not tax or legal advice. Contractor licensing limits vary by state.