Questions
Answers to the bookkeeping and tax questions we hear most from contractors, trades, and service business owners.
Do I need a bookkeeper for my contracting business?
Most contractors do, especially once they're juggling multiple jobs, subcontractors, and equipment purchases. The complexity of construction accounting makes it easy to lose money without realizing it.
Read answerWhat's the difference between a bookkeeper and a CPA?
A bookkeeper handles the day-to-day recording of your transactions, reconciliations, and financial reports. A CPA is a licensed professional who can file tax returns, represent you before the IRS, and provide tax strategy. Both roles feed into each other.
Read answerWhen should a small business hire a bookkeeper?
Most small businesses should hire a bookkeeper as soon as they have regular income and expenses flowing through the business. Waiting until tax time or until things feel out of control usually means paying more to fix problems that proper bookkeeping would have prevented.
Read answerShould I do my own bookkeeping or hire someone?
Most trades business owners start doing their own books, fall behind, and end up with a mess at tax time. If your books are consistently months behind or you're unsure what you're doing, hiring someone will save you money in the long run.
Read answerHow much does a bookkeeper cost for a small business?
Most small businesses pay between $200 and $2,000 per month for bookkeeping, depending on transaction volume, number of accounts, and complexity. Trades and contractor businesses often land in the middle of that range.
Read answerWhat should a bookkeeper do for a contractor?
A bookkeeper for a contractor should handle much more than basic data entry. They need to track job costs, manage subcontractor payments, categorize expenses for maximum deductions, and deliver reports that show profitability by project.
Read answerCan a bookkeeper do my taxes or do I need a CPA?
A bookkeeper can legally prepare tax returns in California if they're registered, but they can't represent you before the IRS or provide strategic tax advice. For trade businesses, working with someone who handles both bookkeeping and taxes produces the best results.
Read answerWhat's a reasonable monthly fee for bookkeeping services?
Most small service businesses pay between $200 and $600 per month for professional bookkeeping. The actual number depends on transaction volume, how many accounts you have, and whether your industry requires specialized tracking.
Read answerHow do I find a good bookkeeper for my trades business?
Look for someone who already works with trades and construction businesses. Industry experience matters more than general bookkeeping skill because trades companies have specific needs around job costing, subcontractor payments, and equipment that generic bookkeepers often get wrong.
Read answerWhat questions should I ask before hiring a bookkeeper?
Ask about industry experience, what's included in the monthly price, how they communicate, and what reports you'll receive. The answers will tell you whether they'll actually help you run your business or just enter transactions.
Read answerIs it worth paying for bookkeeping when I'm just starting out?
In most cases, yes. Starting with clean books from day one costs far less than fixing messy records later. Even basic bookkeeping helps you track real profitability and avoid surprises at tax time.
Read answerWhat does a CPA do that a bookkeeper doesn't?
A CPA is a licensed professional who can file tax returns, represent you before the IRS, and provide strategic tax and financial advice. A bookkeeper handles the daily recording of transactions that makes all of that possible.
Read answerHow much does a CPA charge for a small business tax return?
It depends on your entity type and the complexity of your finances. A simple Schedule C might cost $300 to $800, while an S-corp return can run $1,000 to $2,000 or more. The condition of your books is often the biggest factor.
Read answerDo I need a local bookkeeper or can I use someone remote?
Either can work, but industry expertise matters more than geography. A remote bookkeeper who understands trades and construction will serve you better than a local generalist who doesn't know job costing or contractor deductions.
Read answerWhat's the difference between an accountant and a bookkeeper?
A bookkeeper handles day-to-day financial recording like categorizing transactions and reconciling accounts. An accountant uses those records for tax prep, compliance, and strategic planning. Most trades businesses need both.
Read answerHow do I set up bookkeeping for my plumbing business?
Start with a dedicated business bank account and credit card, set up QuickBooks Online with a plumbing-friendly chart of accounts, and build a weekly habit of categorizing transactions and reconciling your accounts.
Read answerWhat records do I need to keep for my contracting business?
Keep income records, expense receipts, job-related documents, payroll files, subcontractor paperwork, and vehicle logs. Most records should be kept for at least three to seven years depending on the type.
Read answerHow often should I reconcile my business bank account?
At minimum, once a month. But weekly is better if you want to catch errors, spot duplicate charges, and actually trust the numbers in your accounting software.
Read answerWhat's the difference between cash and accrual accounting?
Cash accounting records income when you receive payment and expenses when you pay them. Accrual accounting records both when they're earned or owed, regardless of when money actually changes hands.
Read answerHow do I set up a chart of accounts for a construction company?
The key is separating job costs from overhead expenses so you can see true gross profit on each project. Break your Cost of Goods Sold into materials, subcontractors, direct labor, and equipment, then keep operating expenses in their own section.
Read answerHow do I track expenses for my HVAC business?
Use a dedicated business bank account and credit card, code every expense to a job in your accounting software, and reconcile weekly. The goal is knowing what each service call or install actually costs you.
Read answerWhat bookkeeping software is best for contractors?
QuickBooks Online is the best option for most contractors. It handles job costing, invoicing, 1099 tracking, and integrates with nearly every construction and field service app. It's also what most bookkeepers and CPAs already use.
Read answerHow do I separate personal and business expenses?
Open a dedicated business bank account and credit card, then run every business transaction through those accounts. Stop using personal accounts for business purchases and use owner's draws when you need to pay yourself.
Read answerDo I need a separate bank account for my side business?
You're not legally required to as a sole proprietor, but you absolutely should. Mixing personal and business transactions makes bookkeeping harder, costs you deductions at tax time, and creates problems if you ever get audited.
Read answerHow long should I keep business receipts and records?
The IRS generally requires three years from your filing date, but the safe rule is seven years. Some records like asset purchases and entity documents should be kept permanently.
Read answerWhat financial reports should a contractor review monthly?
At minimum, review your profit and loss statement, balance sheet, accounts receivable aging, and job costing reports every month. These tell you whether you're actually making money, who owes you, and which jobs are profitable.
Read answerHow do I read a profit and loss statement?
A profit and loss statement reads top to bottom. Revenue at the top, then cost of services, then operating expenses, with net profit at the bottom. Each section tells you something different about how your business is performing.
Read answerWhat is a balance sheet and do I need one?
A balance sheet shows what your business owns, what it owes, and what's left over as equity. If you're a trades or construction business, you absolutely need one for taxes, bonding, loans, and understanding your financial position.
Read answerHow do I track income from multiple jobs at the same time?
Assign every invoice and expense to a specific job in your accounting software. QuickBooks Online's Projects feature or classes let you track income and costs per job so you can see profitability on each one.
Read answerWhat does a bookkeeper need from me each month?
Less than you'd think. With bank feeds connected and a basic routine, most trade and service business owners spend 15 to 30 minutes a month supporting the bookkeeping process.
Read answerHow do I set up QuickBooks for my construction business?
Start with a construction-specific chart of accounts, enable Projects for job costing, and build out your items list to match how you estimate and invoice. Generic setup won't give you the reporting contractors actually need.
Read answerIs QuickBooks Online or Desktop better for contractors?
QuickBooks Online is the better choice for most contractors today. Cloud access from job sites, easier collaboration with your bookkeeper, and continued development from Intuit all favor Online over Desktop.
Read answerHow do I do job costing in QuickBooks?
Use the Projects feature in QuickBooks Online Plus or Advanced to create a project for each job, then code every expense, invoice, and time entry to the correct project. Run the Project Profitability report to see margins by job.
Read answerCan I use QuickBooks to track subcontractor payments?
Yes. QuickBooks Online handles subcontractor tracking well if you set up each sub as a 1099-eligible vendor, code payments to the right jobs, and collect W-9s before you pay anyone.
Read answerWhat's the best QuickBooks plan for a small service business?
QuickBooks Online Plus is the right fit for most small service businesses. It includes project tracking for job costing, handles multiple users, and supports the reporting that trades and service companies actually need.
Read answerHow do I categorize expenses in QuickBooks for a trades business?
Separate job-related costs like materials and subcontractors from overhead like insurance and office expenses. The key is using a chart of accounts built for how trades businesses actually spend money, not QuickBooks defaults.
Read answerCan QuickBooks handle progress billing for contractors?
Yes. QuickBooks Online has a built-in Progress Invoicing feature that lets you bill against an estimate in stages. It works well for most small to mid-size contractors, though it has some limitations compared to construction-specific software.
Read answerHow do I set up classes in QuickBooks for different job sites?
Turn on class tracking in QuickBooks Online settings, then create a class for each job site. Assign the correct class to every transaction so you can pull profit and loss reports by job and see which sites are actually making money.
Read answerDo I need QuickBooks training or can I figure it out myself?
You can learn the basic clicks from YouTube, but clicking buttons isn't the hard part. Setting up QuickBooks correctly for your specific business and understanding the accounting behind it is where most people go wrong.
Read answerHow do I connect my business bank account to QuickBooks?
In QuickBooks Online, go to Transactions, click Connect Account, search for your bank, and enter your online banking credentials. The process takes a few minutes, but you need online banking enabled with your bank first.
Read answerWhat tax deductions can contractors claim?
Contractors can deduct vehicle costs, tools, equipment, materials, subcontractor payments, insurance, licensing fees, and more. The key is actually tracking and documenting these expenses throughout the year so nothing gets missed at tax time.
Read answerWhat are the biggest tax write-offs for electricians?
Vehicles, tools, materials, insurance, and licensing fees are the biggest deductions for electricians. Most leave money on the table not because the deductions don't exist but because they aren't tracking expenses consistently throughout the year.
Read answerWhat can plumbers deduct on their taxes?
Almost every ordinary expense you incur running your plumbing business is deductible. Tools, your service van, parts, insurance, licensing, marketing, and more. The key is tracking everything properly so nothing falls through the cracks.
Read answerWhat tax deductions are available for HVAC contractors?
HVAC contractors can deduct vehicle costs, tools and equipment, refrigerant and parts inventory, EPA certifications, insurance, and more. The key is tracking everything throughout the year so nothing gets missed at tax time.
Read answerWhat are common tax deductions for a landscaping business?
Landscaping businesses can deduct equipment, vehicle costs, fuel, materials, labor, insurance, and more. The key is capturing every expense throughout the year so nothing falls through the cracks at tax time.
Read answerWhat can I write off for my cleaning business?
Cleaning businesses can deduct supplies, equipment, vehicle expenses, insurance, labor costs, marketing, and phone and internet costs. Tracking these consistently throughout the year is what separates a big tax bill from a manageable one.
Read answerAre contractor tools and equipment tax deductible?
Yes. Tools and equipment used for your trade are fully deductible. Smaller items can be expensed immediately, while larger equipment can be deducted through Section 179 or depreciated over time.
Read answerCan I deduct my work boots, uniforms, and safety gear?
Yes, if you're self-employed or a business owner. Work boots, uniforms, and safety gear are deductible business expenses as long as they're required for your work and not suitable for everyday wear.
Read answerAre business license and permit fees tax deductible?
Yes, business license and permit fees are deductible as ordinary and necessary business expenses. For trades businesses, these costs add up quickly and should be tracked carefully throughout the year.
Read answerCan I deduct continuing education and trade certifications?
Yes, if the education maintains or improves skills in your current trade, it's a deductible business expense. License renewals, code update courses, OSHA certifications, and manufacturer training all qualify. Education that qualifies you for a completely new profession does not.
Read answerAre business meals with clients tax deductible?
Yes, business meals with clients are 50% deductible as long as you or an employee are present, the meal has a clear business purpose, and you keep proper documentation.
Read answerCan I deduct my cell phone bill for business use?
Yes, but only the portion used for business. If you use one phone for both personal and business, you need to estimate the business percentage and deduct only that amount.
Read answerWhat insurance premiums can I deduct as a contractor?
Most insurance premiums you pay to run your contracting business are fully deductible. This includes general liability, workers' comp, commercial auto, tools and equipment coverage, and more. Health insurance has special rules for self-employed contractors.
Read answerAre advertising and marketing expenses tax deductible?
Yes. Advertising and marketing costs are fully deductible as ordinary business expenses. This includes everything from Google Ads and vehicle wraps to yard signs and branded uniforms. The key is documenting the expense and keeping it clearly tied to the business.
Read answerCan I write off materials I buy for a job?
Yes. Materials purchased for a job reduce your taxable income whether they're classified as cost of goods sold or job expenses. The key is tracking them properly so nothing gets missed at tax time.
Read answerWhat home office deductions can a contractor take?
Contractors can deduct home office expenses if they use a dedicated space regularly and exclusively for business. You can choose the simplified method at $5 per square foot or the regular method based on actual expenses like rent, utilities, and insurance.
Read answerHow do I calculate the home office deduction?
There are two methods. The simplified method gives you $5 per square foot up to 300 square feet. The regular method applies your business-use percentage to actual home expenses like rent, utilities, and insurance, and usually results in a larger deduction.
Read answerCan I deduct health insurance premiums if I'm self-employed?
Yes. Self-employed individuals can deduct health insurance premiums for themselves, their spouse, and their dependents. It's an above-the-line deduction on your personal tax return, meaning you get it even if you don't itemize.
Read answerWhat are Section 179 deductions for equipment?
Section 179 lets you deduct the full purchase price of qualifying business equipment in the year you buy it instead of spreading the deduction over several years through depreciation. For contractors and trades businesses, this applies to trucks, trailers, tools, machinery, and more.
Read answerHow does equipment depreciation work for small businesses?
Depreciation spreads the cost of equipment purchases across multiple years as tax deductions. But options like Section 179 and bonus depreciation let most small businesses write off the full amount in year one.
Read answerCan I deduct my truck if I use it for my contracting business?
Yes, but only the business-use portion. You can deduct truck costs using either the standard mileage rate or the actual expense method, and heavier trucks may qualify for a full first-year write-off under Section 179.
Read answerWhat is the IRS standard mileage rate this year?
The 2025 IRS standard mileage rate for business use is 70 cents per mile. You can use this rate instead of tracking actual vehicle expenses, and it covers gas, insurance, depreciation, and maintenance.
Read answerShould I track mileage or use actual vehicle expenses?
It depends on the vehicle and how you use it. For contractors and trades businesses driving trucks, actual expenses often save more. But both methods require solid mileage records.
Read answerHow do I keep a mileage log for the IRS?
Record the date, destination, business purpose, and miles driven for every trip, and do it the same day. The IRS requires contemporaneous records, so a log recreated at year end won't hold up in an audit.
Read answerCan I deduct gas and maintenance for my work vehicle?
Yes, but you need to choose between the actual expense method and the standard mileage rate. Contractors with trucks often save more using actual expenses, though both methods require tracking your business miles.
Read answerWhat's the best way to track business miles?
Use a mileage tracking app that logs trips automatically. The IRS requires the date, destination, business purpose, and miles for every trip, and no one remembers all of that at year end.
Read answerCan I deduct a truck payment as a business expense?
Not exactly. The loan payment itself isn't deductible, but the cost of the truck (through depreciation) and the interest on the loan are. The distinction matters for both your books and your tax return.
Read answerHow does vehicle depreciation work for contractors?
Depreciation lets you deduct the cost of a work vehicle over time, but heavy trucks and vans over 6,000 lbs qualify for much larger first-year deductions through Section 179 and bonus depreciation. Business use percentage and proper documentation determine how much you can actually claim.
Read answerDo I need to track every trip or just business miles?
You only deduct business miles, but if your vehicle has any personal use, you need a log of total miles to prove the business percentage. The IRS wants date, destination, purpose, and mileage for every business trip.
Read answerCan I deduct tolls and parking for work?
Yes, as long as the driving is for business and not your regular commute. Tolls and parking are deductible on top of the standard mileage rate, which makes them one of the more commonly missed deductions for contractors.
Read answerDo I need to send 1099 forms to my subcontractors?
Yes, if you paid a subcontractor $600 or more during the year. You'll file a 1099-NEC for each qualifying sub and send copies to both the IRS and the subcontractor by January 31.
Read answerWhat's the threshold for issuing a 1099 form?
The threshold is $600 for the 1099-NEC, which covers payments to subcontractors and other non-employees. If you paid someone $600 or more for services during the year, you need to file one.
Read answerWhen do I need to collect W-9 forms from subs?
Collect a W-9 from every subcontractor before you make the first payment. Waiting until year-end to chase down tax information from subs who've already moved on is one of the most common and avoidable headaches in construction bookkeeping.
Read answerWhat's the difference between a W-2 employee and a 1099 contractor?
A W-2 employee works under your direction and you handle their payroll taxes. A 1099 contractor runs their own business and handles their own taxes. The distinction matters because misclassifying workers can result in serious penalties, especially in California.
Read answerWhat happens if I misclassify a worker as 1099?
You'll owe back payroll taxes, penalties, and interest at the federal level. In California, the consequences are even steeper thanks to the ABC test under AB5, which makes it harder for trade and construction businesses to classify workers as independent contractors.
Read answerHow do I report subcontractor payments to the IRS?
You report subcontractor payments using Form 1099-NEC for anyone you paid $600 or more during the year. The form is due to both the IRS and the subcontractor by January 31. Collect a W-9 from every sub before you pay them.
Read answerDo I issue a 1099 to an LLC?
It depends on how the LLC is taxed. You issue a 1099 to LLCs taxed as sole proprietorships or partnerships, but generally not to LLCs taxed as S-corps or C-corps. A W-9 from the payee tells you which situation you're dealing with.
Read answerWhat is a 1099-NEC and when do I file it?
A 1099-NEC reports nonemployee compensation of $600 or more paid to individuals or unincorporated businesses during the year. You must file it with the IRS and deliver a copy to the recipient by January 31.
Read answerHow do I track payments to subcontractors for tax time?
Collect a W-9 from every sub before their first payment, pay through traceable methods, and record each payment in your accounting software by vendor. At year end you'll need to file a 1099-NEC for every subcontractor you paid $600 or more.
Read answerCan I get in trouble for not sending 1099s?
Yes. The IRS charges penalties starting at $60 per missing form and going up to $630 for intentional disregard. Beyond fines, you risk losing the deduction for payments where no 1099 was filed.
Read answerHow do I set up payroll for my small contracting business?
Register for federal and California state employer accounts, get workers' comp insurance, choose a payroll system, and classify your workers correctly before running your first paycheck.
Read answerWhat's the easiest way to run payroll for a few employees?
Use a cloud payroll service like QuickBooks Payroll or Gusto. They calculate taxes, file returns, and handle direct deposits. The key is getting it set up correctly from the start, especially in California.
Read answerHow much should I withhold from employee paychecks?
You're required to withhold federal income tax, Social Security, Medicare, and state income tax from every paycheck. The exact amounts depend on each employee's W-4, their wages, and California-specific taxes like SDI.
Read answerWhen are payroll taxes due?
Federal payroll tax deposits are due either monthly or semi-weekly depending on your total tax liability. Quarterly returns (Form 941) are due at the end of the month following each quarter. California has its own deadlines that largely mirror the federal schedule.
Read answerDo I need a payroll service or can I do it myself?
You can technically run payroll yourself, but California's compliance requirements make it risky without proper software or support. A payroll service or payroll software usually costs less than the penalties for getting it wrong.
Read answerHow do I handle workers' comp for my crew?
California requires workers' comp for every employer with at least one employee. Getting coverage is step one, but keeping accurate payroll records by classification code is what keeps your premiums fair and your annual audit painless.
Read answerWhat forms do I need when I hire a new employee?
At minimum you need a W-4, Form I-9, and to report the new hire to California EDD within 20 days. There are a few other items to handle before that employee starts working.
Read answerHow much does payroll processing cost for a small business?
Most small businesses pay between $40 and $200 per month for payroll processing, depending on employee count and how much of the work they handle themselves. The real cost depends on whether you use software or outsource it entirely.
Read answerDo I need to pay estimated quarterly taxes?
If you're self-employed and expect to owe $1,000 or more in federal taxes, yes. Most contractors and trade business owners need to make quarterly payments because no employer is withholding taxes from their income.
Read answerHow do I calculate my quarterly estimated tax payment?
The simplest approach is the safe harbor method. Pay 100% of last year's total tax liability divided by four (110% if your AGI exceeded $150,000). This avoids underpayment penalties regardless of what you end up owing.
Read answerWhen are estimated tax payments due?
Federal estimated tax payments are due four times a year: April 15, June 15, September 15, and January 15. California follows the same schedule. Missing a deadline triggers penalties and interest even if you pay in full when you file.
Read answerWhat happens if I miss a quarterly tax payment?
The IRS charges an underpayment penalty that works like interest on what you should have paid. It's not catastrophic, but the longer you wait, the more it costs. Pay what you can as soon as you can to minimize the damage.
Read answerHow much should I set aside for taxes as a contractor?
Most contractors should set aside 25% to 30% of their net income for taxes. In California, the number leans closer to 30% once you factor in self-employment tax, federal income tax, and state income tax.
Read answerWhat percentage of income should self-employed people save for taxes?
Plan on setting aside 25% to 30% of your net income, though in California the number can run higher. The exact percentage depends on your income level, deductions, and how your business is structured.
Read answerCan I pay estimated taxes annually instead of quarterly?
Technically you can, but the IRS will charge you an underpayment penalty for each quarter you missed. The penalty works like interest on what you should have paid, so waiting until year-end almost always costs more than just paying quarterly.
Read answerWhat is the self-employment tax rate?
The self-employment tax rate is 15.3% on net self-employment income. That covers both Social Security (12.4%) and Medicare (2.9%), which W-2 employees split with their employer but self-employed individuals pay in full.
Read answerHow do I pay quarterly taxes to the IRS?
Make estimated tax payments four times a year using IRS Direct Pay or EFTPS. The due dates are April 15, June 15, September 15, and January 15. Base each payment on your expected annual tax liability or your prior year's total tax.
Read answerDo I owe a penalty for underpaying estimated taxes?
You likely do if you didn't pay at least 90% of what you owe for the current year or 100% of last year's tax liability through estimated payments. The IRS and California each charge their own underpayment penalties, calculated as interest on the shortfall for each quarter.
Read answerWhat documents do I need for my business tax return?
You'll need income records, expense documentation, payroll reports, 1099s for subcontractors, vehicle logs, and loan or equipment purchase details. Having organized books throughout the year makes gathering everything at tax time significantly easier.
Read answerWhen is the deadline for filing a business tax return?
It depends on your business structure. Partnerships and S-corporations are due March 15. Sole proprietors and C-corporations are due April 15. Extensions are available but don't extend your time to pay.
Read answerWhat's the difference between a personal and business tax return?
A personal tax return reports all your individual income. A business tax return reports your company's revenue, expenses, and profit. Most trades business owners file both, and the two returns are directly connected.
Read answerDo I file a Schedule C if I'm a sole proprietor?
Yes. If you're a sole proprietor, you report your business income and expenses on Schedule C, which gets filed alongside your personal Form 1040. It's how the IRS sees your business profit or loss.
Read answerHow do I file taxes for my LLC?
It depends on how your LLC is classified for tax purposes. The IRS doesn't treat all LLCs the same. Your filing requirements change based on whether you're a single-member LLC, a partnership, or have elected S-corp or C-corp status.
Read answerWhat tax forms does an S-corp need to file?
Every S-corp files Form 1120-S with the IRS and a K-1 for each shareholder. Beyond that, you'll have payroll tax forms, state returns, 1099s for subcontractors, and your personal return where the business income actually gets taxed.
Read answerCan I file my business taxes myself or do I need a CPA?
You can legally file your own business taxes. But for most contractors and trades businesses, the complexity of deductions, depreciation, and self-employment tax makes a CPA worth the cost.
Read answerHow do I prepare for tax season as a small business owner?
Start by getting your books current and reconciled. Then gather all income and expense documentation, review your deductions, and organize 1099s and W-2s well before your filing deadline.
Read answerWhat is catch-up bookkeeping?
Catch-up bookkeeping is the process of recording, organizing, and reconciling all the financial transactions your business missed over weeks, months, or even years. It brings your books current so you have accurate financials going forward.
Read answerHow much does catch-up bookkeeping cost?
Catch-up bookkeeping is typically priced per month of work needed, and costs depend on how far behind you are, how many transactions you have, and whether any records exist. Most trade and service businesses pay between $300 and $1,000+ per month of backlog.
Read answerI'm behind on my bookkeeping—where do I start?
Start by gathering your bank and credit card statements for the months you've missed. Figure out how far behind you are, then work forward from the last month your books were accurate. Prioritize anything tied to upcoming tax deadlines first.
Read answerCan a bookkeeper help me catch up on months of messy records?
Yes. Cleaning up months of backlogged or disorganized books is one of the most common things a bookkeeper does for trade and service businesses. The process involves gathering bank and credit card statements, categorizing every transaction, and reconciling the accounts so your financials are accurate.
Read answerHow long does it take to catch up on a year of bookkeeping?
A year of catch-up bookkeeping usually takes two to six weeks of active work. The actual timeline depends on transaction volume, how many accounts you have, and whether any records exist.
Read answerWhat happens if I haven't done my bookkeeping in years?
You're exposed to IRS penalties, missed deductions, and blind decision-making. The good news is it's fixable. Catch-up bookkeeping reconstructs your financial records so you can get current and move forward.
Read answerHow do I organize old receipts and bank statements?
Start by sorting everything by tax year, then separate receipts from statements. Focus on the most recent three years first since those are the ones the IRS is most likely to ask about.
Read answerHow do I improve cash flow in my contracting business?
Start by billing faster, requiring deposits, and shortening payment terms. Most contractors have cash flow problems not because they lack revenue but because money goes out before it comes in.
Read answerWhat is cash flow forecasting and do I need it?
Cash flow forecasting projects your money coming in and going out over future weeks or months. If you run a trade or service business with uneven payment cycles, it helps you avoid cash crunches before they happen.
Read answerHow do contractors handle uneven or seasonal cash flow?
Build a cash reserve during busy months, collect deposits and progress payments on every job, and keep fixed costs low enough to survive the slow stretches. The contractors who manage this well aren't guessing. They have accurate books and a simple cash flow forecast that shows what's coming.
Read answerWhat payment terms should I put on my invoices?
For most service-based and trade businesses, Net 15 or Net 30 are standard. The right choice depends on your cash flow needs, the size of the job, and whether you're billing residential or commercial clients.
Read answerHow do I deal with customers who pay late?
Prevent late payments with clear terms, upfront deposits, and immediate invoicing. When customers do pay late, use aging reports to catch it early and follow a consistent collection process so nothing slips through the cracks.
Read answerShould I offer payment plans to my customers?
You can, but understand you're essentially financing the job yourself. If your cash flow can handle delayed payments and you track receivables carefully, payment plans can help you win bigger projects. Without structure and follow-through, they create collection headaches.
Read answerHow do I create a budget for my service business?
Start with your actual numbers from the past 12 months, then build forward. A service business budget needs to account for uneven revenue, labor as your biggest cost, and seasonal swings in work volume.
Read answerWhat is a fractional CFO and does my business need one?
A fractional CFO is a part-time financial strategist who helps you make bigger-picture decisions about your business without the cost of a full-time hire. Most trade and service businesses benefit from one once they're past the survival stage and need help planning growth.
Read answerHow do I know if my business is actually profitable?
Your bank balance doesn't tell you. Profitability comes from an accurate profit and loss statement that accounts for every expense. Without clean books, you're guessing.
Read answerWhat financial documents do I need to get a business loan?
Lenders typically want two to three years of tax returns, a current profit and loss statement, a balance sheet, bank statements, and a debt schedule. Having clean, up-to-date books makes the difference between a smooth application and a scramble.
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