Plumbers offer a valuable service that impacts the health and hygiene of a community. Likely, the lifeblood of your plumbing company is the revenue you receive from customers. Plumbing company bookkeeping makes it possible for you to keep accurate records and follow-up with customers who are not paying for the services rendered.
How Plumbing Company Accounting Helps Monitor Expenses
As a plumbing company owner, there are two primary expenses your business incurs. These are labor and parts. When you purchase parts to do repairs on your customer's homes or businesses, you need to accurately record the prices paid for the parts and where the parts were purchased. This aspect of plumbing company bookkeeping allows you to charge your customers appropriately and helps you improve your plumbing company tax planning by providing you with evidence of business expenses for when tax time rolls around.
If you work on your own, it’s relatively easy to keep track of labor expenses. However, if you have additional plumbers employed, a plumbing company CPA will need to accurately record hours worked using time cards. They will link the work done by a particular plumber to the cost of a job. This information could allow you, as a business owner or business manager, to identify the employees who are the most productive. It allows you to show proof of business expenses when the time comes to do your business taxes or payroll.
Things to Consider When Preparing Your Plumbing Company Tax Planning Strategy
It can be beneficial to do your tax planning year-round. The more aware you are of taxes throughout the year, the easier things could go when it is time to file your taxes.
Have Your Plumbing Company CPA Keep Track of Business Deductions
For your plumbing business to take full advantage of deductions, your CPA should be diligent in keeping records and recording all reasonable and necessary business expenses. Some of these experiences are obvious, such as salaries, rent, and the purchase of certain tools. Business travel expense, food, and communications used for your business may also be eligible as a deduction.
Classify Your Business Properly
Talk to your plumbing company financial adviser about the best classification for your business. If you have not classified your company properly, you might pay unnecessarily high taxes. Is your business a sole proprietorship, an LLC, or a partnership? Your plumbing company accountant can help you find the right classification for your situation.
Pay Tax Payments in Installments
Paying your taxes in installments is an intricate part of successful plumbing company accounting. As a small to medium-size business, you may get hit with a larger than expected tax burden. This could threaten to close your business as it drains you of cash flow. Talk to your plumbing company financial adviser about the benefits of paying in smaller installments. This may keep more cash in your hands, especially if your small business already has narrow margins or restrictive cash flow. As you may have concluded, bringing in additional professional help can be advantageous for your company. For this reason, we at Fusion CPA offer assistance to businesses, like yours to maximize efficiencies across the board. We offer tax planning, accounting, bookkeeping, and CFO business advisory. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive