Keeping Track of Where the Money Goes in Your Lawn Mowing Business.

How to Keep Track of Your Money

When you run a lawn mowing business and start getting your first customers on board, you are too busy to worry about income and expenditure. You will have to get a handle on this sooner rather than later. Ignore this step at your peril. Unless you get a good foundation in place, the larger your business becomes, the harder it is going to be to manage. It is an excellent time to ensure that sound systems are in place. I know of a guy who had a customer who was three months behind, and he didn’t even notice. If you are not keeping track of where the money goes, then you may run out of funds.

Do Not Use Personal Accounts

A mistake that many new lawn mowing businesses make is using their personal account for their business. It’s okay if you do this if you already have some gear and you bring on your first half a dozen lawns to test the viability of the business. Still, it could be better, as you will need to change bank account numbers for your customers when you set up your business account.

Why mixing accounts is a mistake:

• Audit Nightmares: Your personal expenditure will get mixed up with your business expenditure. This is going to make your end-of-year returns a nightmare.
• Increased Costs: You will have to wade through all of your bank statements and separate the business vs personal expenses. This is the digital version of dumping a box of invoices on an accountant’s desk—it will cost you twice as much in fees.

The Best Way to Begin

1. Set up a business bank account from the start

The first step is to set up a bank account for your business. Depending on where you are, you may need to register your business first.

2. Record your initial investment

Next, you should deposit all the funds you are using to start the business and mark the deposit as “capital introduced” (or similar), so there is a record of your starting capital.

Use Software for Record Keeping

Using software is one of the best ways to keep track of your income and expenditure. With most software, you can sync your bank account and reconcile transactions on a regular basis.

• Zoho Books: Free for up to 50K turnover, then a small yearly fee.
• QuoteIQ: Full scheduling software starting at only $29 a month.

Good accounting software allows you to see customer balances, transaction activity, and historical income charts with just a few taps. This helps you make informed decisions for a successful future.

Transform Your Business from a Cash-Eating Monster

The Profit First method is a great way to take control. By setting a profit target before you begin to pay expenses, you ensure you have enough money to cover all your costs and still have something left over for yourself.

Tip: A cash flow chart will help you predict when you may need an overdraft or when you will have excess funds.

Set Up a Healthy Payment Plan

Pay yourself regularly

Refrain from using your business card as a personal piggy bank (like buying pies when you are on the road).

• The Friday Rule: Pay yourself once a week on a Friday and clearly mark the transfer as “drawings.”
• The 50% Rule: Pay yourself 50% of turnover each week for your first year. Leave the rest for the business to cover taxes and gear.
• Avoid “Toys”: Don’t buy new gear unless you really need it. Get value from the equipment you already have.

Keep your receipts

Don’t just throw everything in a box willy-nilly.

1. Get a concertina file.
2. Write the year on the front and the months on the pockets.
3. Each month, use a new pocket for receipts.
4. Store the file for seven years.

Use an Accountant

A good accountant will pay for themselves in savings. Find someone local with good reviews and reasonable fees.

Utilize Scheduling and Payment Systems

Pay your bills on time and make sure your customers do the same. Then everyone will be happy.