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How to Set Up Basic Bookkeeping for Your Handyman Business

bookkeeping for handyman business

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Congratulations on your handyman business! Now that you’ve taken the first steps to establish your business, you will need to set up basic bookkeeping for your handyman business. According to Wikipedia, “Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations.” Essentially, it’s a way of separating the sales from the purchases, receipts, and payments. It’s documenting whether it’s a cash or credit transaction.

Why Bookkeeping Matters for Your Handyman Business

Bookkeeping is essential for your handyman business because it organizes transactions, provides insights into your financial health, and simplifies tax preparation. With well-documented finances, you’ll be ready to make informed decisions and address financial needs effectively.

How to Set Up a Bookkeeping System

Setting up a bookkeeping system doesn’t have to be overwhelming. By following these steps, you can create a process that suits your strengths and keeps your workload manageable.

Step 1: Choose Your Bookkeeping Method

Decide how you’ll organize your bookkeeping system based on your comfort level and resources:

  1. Manual: Use spreadsheets like Excel or Google Sheets to manually track and categorize transactions.
  2. Digital: Use bookkeeping software like QuickBooks, Wave, or Xero. These tools allow you to link business accounts and automatically categorize transactions.
  3. Hybrid: Combine manual and digital methods. This is a great approach if you’re transitioning from spreadsheets to software.

 

Tip: Start with the method you find easiest to maintain. You can upgrade if you need to as your business grows.

Step 2: Separate Business and Personal Finances

Keeping your business and personal finances separate is critical for clear records and simplified tax preparation. Consider opening these accounts:

  • Business checking account: Track all income and expenses.
  • Business savings account: Save for large purchases like equipment.
  • Tax savings account: Set aside funds for taxes to avoid surprises.

 

You may also want a business credit card for expenses, but be sure to pay it off regularly to maintain cash flow and avoid unnecessary debt.

Learn more about business banking accounts through resources like the U.S. Small Business Administration.

Step 3: Create Financial Categories

Organize your transactions into two main categories: income and expenses.

  • Examples of income: Customer payments, material reimbursements
  • Examples of expenses: Tools, transportation, marketing, software subscriptions

 

By categorizing transactions, you’ll have a clear view of where your money comes from and where it’s going.

Step 4: Track Transactions Consistently

Consistency is key to staying on top of your finances. Avoid procrastinating, as it can lead to unnecessary stress.

  • Record income and expenses weekly or daily.
  • Keep all receipts, invoices, and payment records organized.

 

Tip: Set a recurring reminder to update your books to build a habit.

Step 5: Automate When Possible

Save time and reduce manual errors by automating your bookkeeping tasks. Software like QuickBooks can link to your business accounts, automatically recording and categorizing transactions.

Automation simplifies your workflow, so you can focus more on growing your handyman business.

Best Practices for Handyman Bookkeeping

  1. Keep your receipts organized.
  2. Dedicate time weekly or monthly to review and update your books.
  3. Compare your records with bank statements to avoid errors.
  4. Use mileage-tracking apps (like MileIQ) or maintain a manual log for tax deductions.
  5. Ensure you always have enough to cover upcoming expenses.

Essential Tools to Simplify Bookkeeping for Your Handyman Business

Simplify your bookkeeping with tools designed to save time and streamline your processes. For invoicing and payment processing, Project 2 Payment is an excellent choice.

Here’s why:

  • User-friendly billing software: Create professional invoices and manage billing effortlessly.
  • Integrated payment processing: Accept payments seamlessly and track them in one place.
  • QuickBooks integration: Automatically sync your invoicing and payment data with QuickBooks, eliminating the need to input information into multiple systems.
  • Exceptional customer support: Get help when you need it, ensuring your bookkeeping stays on track.

 

By using Project 2 Payment, you’ll spend less time on administrative tasks and more time focusing on growing your handyman business.

Bookkeeping might seem like just another task on your to-do list, but it’s one of the most important foundations of a successful handyman business. By setting up a system that fits your needs, keeping your finances organized, and leveraging tools like Project 2 Payment, you’ll position your business for growth and long-term success. Whether you’re just starting out or looking to improve your financial management, these steps will help you stay in control, save time, and make confident decisions. Remember, a well-organized business isn’t just about numbers—it’s about building the future you envisioned when you first decided to go into business. Start today and set your handyman business on the path to success!

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