Starting a landscaping firm? Read these 4 bookkeeping tips for landscapers
Why is good bookkeeping crucial for landscaping businesses?
The demand for landscaping services in Canada it’s greater than ever before and constantly increasing. The market size of landscaping in Canada has steadily increased since 2013, reaching an estimated value of nearly 13 billion U.S dollars in 2021. The industry comprises establishments primarily engaged in providing landscape care and maintenance services or installing walkways, decks, ponds and other similar structures.
With this market sector constantly increasing, more landscaping businesses are started regularly. However, not all businesses can maintain a constant profit rate and stay competitive for a long time. Good planning and calculated decisions determine business survival or scaling in many cases. Along with the market expansion, the need for bookkeeping services for landscaping it’s also increasing. Keeping a close eye on the business finances and other financial insights helps owners make the right decisions and scale their business effectively.
That’s where well-callibrated bookkeeping comes into play. Evaluating your service profitability puts you in a position to better understand your local market and make wiser decisions regarding your business future. Simply put, tracking your finances gives you knowledge. And when it comes to making educated decisions to guide your landscaping business towards better growth, knowledge is power.
Hopefully, the information you’ll find on this page will help you make a better decision while choosing the bookkeeping services for landscaping or other types of business.
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What tax deductions are available for landscaping businesses?
The Canada Revenue Agency states that businesses can claim all ordinary and necessary expenses that they collect for their business. Expenses vary from business to business. Below we’ve listed some of the most common deductible expenses for landscaping businesses in Canada:
Vehicle expenses
You can claim a deduction based on the mileage or a portion of your total vehicle expenses such as registration fees, insurance or repairs. This is mainly based on how much you use the vehicle for work and personal use.
Insurance
In case you didn’t know already, liability insurance for your landscaping business is also deductible. On the same topic, you can deduct the costs related to dental, personal health or long-term care insurance.
Labor
Landscaping business owners can deduct all payments made to employees or freelance labourers, including your children who work your landscaping business.
Professional services
You can claim a deduction when you pay accountants, bookkeepers, lawyers or other professionals for their services.
Advertising
Anything you spend to advertise your services is deductible. That includes printing flyers, hiring a digital marketing firm or putting ads in the paper.
Repaired or maintenance
From paying the reparation bill of your leaf blower to buying oil for your lawn mower, you can benefit from tax deductions on all of these.
Essential bookkeeping tips for landscapers
If you have a landscaping business, you should be thinking about your bookkeeping and accounting more than just on tax day. Properly calibrating your bookkeeping will help you make smarter, more documented decisions and increase your overall profit margin. Not paying close attention to your bookkeeping processes might overlook goals and important paperwork or even miss key transactions. Below you’ll find four essential bookkeeping tips for landscapers that will help you organise your bookkeeping department better.
1.Track all revenue and expenses carefully
All business owners in Canada must report all their income to the Canada Revenue Agency (CRA). Failure to report accurately might result in the CRA performing an audit on your return and reassessing your tax liability based on the income that was not reported.
The good part is that you can subtract business expenses from your annual income. That’s why tracking expenses is so important for your overall business success and implicit profit margin. Failure to do so will result in your company facing a higher tax liability than it should. Using your bank account statements is a good way to track your expenses successfully. Nonetheless, accounting software available nowadays allows business owners to keep things neat, separate and organised.
2. Make sure you separate business and personal expenses
You’ll have to have an account exclusively for your landscaping business. You should only deposit income from the landscaping business into this account and ensure that it covers all the expenses related to your business. You can also have a credit card that you use exclusively for business expenses. By doing these above, you make it easier to keep track of your business-related expenses and separate them effectively. It also helps you ensure you’re not accidentally mixing up your personal and landscaping expenses.
3. Make documented decisions
Precise reporting is critical for the decisions you’re about to make in regard to your business future. Modern bookkeeping software can generate accurate reports of profit and loss, account receivables cash flow and many more. Alternatively, a dedicated bookkeeper can do the same thing, whether by analysing your data manually or by employing bookkeeping software,
A cash flow statement, for example, can show you when you are most likely to have extra cash, allowing you to determine when you will be able to invest in your equipment. Other than that, precise reports can help you ensure that all your expenses align with your revenue and identify projects with the highest profit and other assets.
4. Get professional help when necessary
Newly started landscaping businesses usually have few clients and very few expenses to consider. However, as the business grows, the complexity of your finances will also change. You might invest in better equipment, hire extra employees, or implement other measures to scale your business.
Although hiring an accountant or bookkeeper for your business might look like another expense, it can save your business money in the long run. A dedicated professional will bring expert taxes and cash flow knowledge, providing you with access to better insights into business growth and profit opportunities.
Looking to outsource bookkeeping services for landscaping businesses?
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Here’s what others say about their experience with AIS Solutions:
“I have now had the pleasure to work with Juliet on 5 mutual corporate tax clients. I can honestly say Juliet and her team are not only cheerful, but they are good! The amount of time that has gone into these mutual clients has been about 20% lower than a comparable-sized client without a trained bookkeeper. The records are clean and reconciled. Any unusual items are easily explained, and the team is quick to provide any information we request. If you want accurate date books and records and to possibly save money on your year-end accounting and tax fees, I would highly recommend AIS Solutions!”
Tim Miron, CA Partner Beckett Lowden Read LLP
“Just wanted to thank you for last week’s QuickBooks training. I look forward to using it…hopefully proficiently…and you provided a great framework with which I can get started. I also really appreciate the handout you supplied at the end of the session. I will make good use of that, I’m sure!”
Buffy Knowlton - Workshop Facilitator & Author
“I have had the good fortune to work with Juliet and her team, at AIS, on 2 business circumstances over the last few years. Her commitment, dedication and professionalism are unquestionable. In every circumstance, she and her team have treated our business like their own. A results-oriented, knowledgeable, focused team of professionals with the highest degree of integrity. It has been a pleasure to work with them.”
Gary Brent - Deblen Holdings Limited
“Juliet is very professional in her business and is highly thought of by her staff, she leads by a good example. Through our years together at BNI I have also got to know Juliet on a personal level and know she has high standards and morals. This makes it easy to refer her. I would not hesitate on recommending Juliet to anyone I know.”
Sharon Jackman - President at Service First Forwarding
“Juliet is very professional in her business and is highly thought of by her staff, she leads by a good example. Through our years together at BNI I have also got to know Juliet on a personal level and know she has high standards and morals. This makes it easy to refer her. I would not hesitate on recommending Juliet to anyone I know.”
Sharon Jackman - President at Service First Forwarding
Frequently Asked Questions
Can I do the bookkeeping for my landscaping business?
If you have the time and knowledge to do so, you can take care of the bookkeeping needs of your small business yourself. However, this can prove time-consuming, and bookkeeping mistakes can be costly. You can always opt for outsourced bookkeeping services for landscaping businesses and have a dedicated expert handle your bookkeeping.
What taxes can I write off my landscaping business?
Are outsourced bookkeeping services a good fit for my landscaping business?
I have a question that is not on this list. Who do I talk to?
Shouldn’t my bookkeeper be local?
Do I need to clean up my books before passing them to AIS Solutions?
Need more than bookkeeping tips for landscapers?
Connect with us and find out how we can help.