How do I set up bookkeeping for my plumbing business?
The first thing to do is separate your business finances from your personal finances. Open a business checking account and get a business credit card. Run every business transaction through those accounts. When you buy fittings at the supply house with your personal debit card and then reimburse yourself later, you create a mess that’s hard to untangle. One business account and one business card makes everything trackable from the start.
Next, set up QuickBooks Online. It’s the standard for skilled trades businesses and most accountants and bookkeepers can work with it. The important part is building your chart of accounts around how a plumbing business actually operates. You want income categories that separate service calls from bigger installation or remodel jobs. On the expense side, you need accounts for parts and materials, vehicle costs, tools and equipment, insurance, licensing, subcontractor payments if you use them, and the usual overhead like phone and office supplies.
If you run jobs that take more than a day or involve significant material costs, turn on job costing in QuickBooks so you can track revenue and expenses by project. This is how you find out which types of work are actually profitable. A lot of plumbers are busy all day but don’t realize their margins on certain job types are razor thin because they never tracked costs at that level.
Set up a system for capturing receipts the same day. Use an app like Dext or just take a photo and file it. Plumbing work means trips to the supply house, hardware store pickups, and online orders for specialty parts. Those receipts disappear fast, and you need them for both job costing and tax deductions.
Reconcile your bank and credit card accounts weekly, not monthly. Weekly reconciliation catches duplicate charges, missed deposits, and coding errors while you still remember what happened. Letting it pile up for a month or longer turns a 15-minute task into an afternoon of guesswork.
If you have employees, get payroll set up through a service like Gusto or QuickBooks Payroll. California has specific requirements around workers’ comp, state payroll taxes, and paid sick leave that you need to handle correctly from day one. Misclassifying workers or missing payroll tax deadlines creates expensive problems.
For invoicing, send invoices the same day you finish the work. Plumbers who wait until the end of the week or month to invoice are leaving money on the table because customers pay faster when the work is fresh in their mind. QuickBooks lets you create and send invoices from your phone on the job site.
The biggest mistake most plumbing business owners make is treating bookkeeping as something to worry about at tax time. By then you’re scrambling to reconstruct a year of activity from bank statements and faded receipts. If you build the habit early, even 20 minutes a week keeps everything current and gives you real numbers to make decisions with.
If setting all this up feels like a lot on top of running jobs, that’s normal. Most trades business owners didn’t get into plumbing to do data entry. Working with someone who provides bookkeeping and tax services for contractors means your books get done right from the start, and you get time back to focus on the actual work.
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More Questions
What'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.
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LLC and S-corp aren't mutually exclusive. An LLC is a legal structure while S-corp is a tax election. The real question is whether your LLC should elect S-corp taxation, which depends on your net profit level.
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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.
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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.
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Your business structure determines how your income is taxed, how much self-employment tax you owe, and what filing requirements you face. For most trades businesses, the biggest decision is whether and when to elect S-Corp status.
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Start early, stay consistent, and escalate gradually. A friendly reminder before the due date, a direct follow-up a few days after, and firmer communication at 30 and 60 days keeps collections moving without burning relationships.
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