Bookkeeping for Handyman Businesses: A Complete Guide

Running a handyman business means juggling multiple jobs, invoices, materials, and schedules—all while making sure your finances stay in order. Without accurate bookkeeping for handyman businesses, it’s easy to lose track of expenses, miss payments, or miscalculate profits. Strong financial records are more than just compliance—they give you a clear picture of how your business is performing and where you can improve.

In this guide, we’ll walk through the essentials of bookkeeping for handyman businesses, including what to track, common mistakes to avoid, and how to create a monthly bookkeeping process that keeps your business on solid ground.

Why Bookkeeping Matters for Handyman Businesses

Handyman businesses often deal with:

• Frequent small jobs across multiple clients.
• Material purchases that can eat into profit if not tracked carefully.
• Fluctuating cash flow depending on seasonality and demand.
• Tax obligations that require accurate records of income and expenses.

Good bookkeeping ensures:

• You know which jobs are profitable.
• You can manage cash flow effectively.
• You’re prepared for tax season with fewer headaches.
• You build financial clarity for long-term growth.

Learn more in our previous article, “Bookkeeping Outsourcing.”

What to Track in Your Handyman Business Books

Here are the key financial areas every handyman business should monitor:

• Income & Invoices

• • Track every job completed, including labor and materials billed.
  • Use job numbers or customer names to keep payments organized.

• Expenses

• • Tools and equipment.
  • Materials and supplies.
  • Vehicle costs (fuel, maintenance, insurance).
  • Marketing and advertising.
  • Business insurance and licenses.

• Payroll & Subcontractors

• • If you have employees, track wages, payroll taxes, and benefits.
  • For subcontractors, keep W-9s on file and track 1099 payments.

• Taxes

• • Federal, state, and local taxes.
  • Sales tax, if applicable in your state.

A Typical Monthly Bookkeeping Process for Handyman Businesses

• Accounts Receivable (A/R)

• • Send invoices promptly after job completion.
  • Follow up on past-due accounts weekly.

• Accounts Payable (A/P)

• • Record bills from suppliers and vendors.
  • Schedule payments to avoid late fees while managing cash flow.

• Payroll (if applicable)

  • Process wages, withholdings, and payroll tax filings.

• Bank Reconciliation

• • Match your bookkeeping records with bank and credit card statements.
  • Identify missing transactions or errors.

• Financial Reporting

• • Review profit & loss (P&L) statements.
  • Track job profitability and expense ratios.
  • Analyze cash flow to anticipate upcoming needs.

Learn more about the bookkeeping process in our previous article, “Bookkeeping for Service Companies.”

Common Bookkeeping Mistakes Handyman Businesses Make

• Mixing personal and business expenses.
• Forgetting to track small purchases (like screws, nails, or gas).
• Delaying invoicing, which slows down cash flow.
• Not reconciling accounts monthly.
• Ignoring taxes until year-end.

Tools & Software for Handyman Bookkeeping

The right software makes bookkeeping easier and more accurate. Popular options include:

• QuickBooks Online – user-friendly, integrates with invoicing and banking.
• Jobber + QuickBooks – great for handyman businesses to tie job management with bookkeeping.
• Xero – simple, cloud-based accounting with reporting features.

How a Bookkeeper or Virtual CFO Can Help

A professional bookkeeper can free up your time, ensure accuracy, and provide reporting that helps you make better decisions. Beyond just recording numbers, a Virtual CFO can:

• Build budgets and forecasts.
• Improve cash flow with better A/R and A/P processes.
• Provide insights into profitability and growth strategies.

Cash vs. Accrual Accounting for Handyman Businesses

When setting up your bookkeeping system, one of the most important choices is whether to use cash basis accounting or accrual basis accounting. Both methods are accepted by the IRS for small businesses, but they have different impacts on how you view income, expenses, and profits.

Cash Basis Accounting

With cash accounting, you record income when you receive payment and expenses when you pay bills.

Benefits:

• Simpler to manage.
• Matches your bank account balance more closely.
• Helps with cash flow visibility—what’s in the bank is what you have.

Disadvantages:

• Doesn’t show money owed to you (accounts receivable).
• Doesn’t capture bills you owe but haven’t paid yet (accounts payable).
• May give an incomplete picture of profitability if jobs run across months.

Best for: Smaller handyman businesses with straightforward transactions, or sole proprietors who want simplicity.

Accrual Basis Accounting

With accrual accounting, you record income when it is earned (invoice sent, job completed) and expenses when they are incurred, even if the money hasn’t changed hands yet.

Benefits:

• Provides a clearer picture of long-term profitability.
• Tracks receivables and payables, so you know what’s coming and what’s due.
• Better for growth planning and securing financing.

Disadvantages:

• More complex and requires consistent tracking.
• Bank account balance may not match reported profits.
• May require additional support from a bookkeeper or accountant.

Best for: Handyman businesses that are growing, working with subcontractors, or want a more accurate picture of their financial health.

Tip: Many handyman businesses start with cash accounting and switch to accrual as they grow. Consulting with a bookkeeper or CFO can help you decide which method fits your business best.

Frequently Asked Questions (FAQ)

How do you keep books for a handyman business?
Keep detailed records of income, expenses, payroll, and taxes. Use accounting software to simplify tracking and reporting.

How should handyman expenses be categorized?
Separate expenses into categories like tools, materials, vehicle costs, payroll, insurance, and marketing. This makes tax filing easier and reporting more insightful.

How much should a handyman business spend on expenses?
Most handyman businesses see expenses range between 60–75% of revenue, depending on overhead and labor mix. Tracking expenses helps ensure profitability.

What’s a healthy profit margin for handyman businesses?
Profit margins typically range from 15–25%, depending on pricing strategy and cost management.

What’s the best accounting software for handyman businesses?
QuickBooks Online, paired with job management tools like Jobber, is a strong option. Xero is another good choice for smaller operations.

Is QuickBooks good for a handyman business?
Yes. QuickBooks is one of the best bookkeeping solutions for handyman businesses. It allows you to send invoices, track expenses, categorize transactions, and integrate with job management tools like Jobber—making it easier to manage both jobs and finances in one system.

What is one of the most common bookkeeping mistakes that business owners make?
One of the most common mistakes is mixing personal and business expenses. This makes it hard to measure profitability, complicates taxes, and can expose owners to legal risks. Keeping separate business accounts is critical.

What are the three golden rules of bookkeeping?

1. Debit what comes in.
2. Credit what goes out.
3. Debit all expenses and losses; credit all incomes and gains.

What are the five basic accounts in bookkeeping?
The five basic categories are:

1. Assets
2. Liabilities
3. Equity
4. Income (Revenue)
5. Expenses

What is a chart of accounts for a bookkeeper?
A chart of accounts is a structured list of all accounts used in your bookkeeping system. For a handyman business, it might include categories for labor income, materials, tools, vehicle expenses, insurance, marketing, and office overhead. It serves as the backbone for organizing transactions.

How to invoice as a handyman?
Always include:

• Business name and contact info.
• Customer name and address.
• Job details (labor, materials, hourly rate, or flat fee).
• Invoice number and date.
• Payment terms (e.g., Net 15, Net 30).
• Accepted payment methods.
  Using software like QuickBooks or Jobber makes this easier by automating invoice creation and payment tracking.

Final Thoughts

Bookkeeping doesn’t have to be complicated—but it does have to be consistent. Whether you’re running solo or managing a growing handyman team, keeping your financials organized helps you stay profitable and confident in your numbers.

If you’re spending more time on paperwork than on jobs, it may be time to outsource your bookkeeping. At Westport Financial, we specialize in helping service-based businesses like handyman companies bring clarity, consistency, and profitability to their financial operations.

👉 Schedule a free consultation today and get your books working as hard as you do.