Bookkeeping For a Cleaning Business in 5 Easy Steps

Back when we used to go to the gym, one day, our trainer said, “If you aren’t going to track your progress, what’s even the point”?   

We admit we had been winging it for a few months and not tracking our progress (hey, this was way back, so who does that when they are 18?)   

We don’t want to bore you with our gym days; however, isn’t that what it feels like to run a cleaning business without properly tracking revenue, expenses, profits, and cash flow?  

So, in this guide, we want to focus on bookkeeping for a cleaning business. If you are running one and can’t seem to manage your finances, stick with us for the next 10 minutes.   

Why Bookkeeping Matters?   

Do you know the cleaning service industry is characterized by excessive turnover, inadequate training, and low morale?   

This instability can jeopardize growth and profitability; hence, you need effective financial management. When you do bookkeeping, it provides a clear picture of your financial situation.   

Here’s how:   

• Maintaining detailed records of income and expenses offers a clear view of your financial health, which enables you to identify profitable services and areas of improvement.   

• Precise bookkeeping ensures that all revenues and expenditures are accurately reported. This simplifies tax preparation and minimizes the risk of audits or penalties.   

• Analyzing financial statements helps uncover opportunities for cost reduction and expansion.   

How to Do Bookkeeping for a Cleaning Business?   

Business expenses such as payroll, supplies, equipment maintenance, and fuel can quickly eat profits if you don’t track them properly. Effective bookkeeping provides a much-needed relief for tracking such expenses. So, let’s see how you can do bookkeeping for a cleaning business the right way:  

1. Set Up a Business Bank Account  

One of the biggest financial mistakes small business owners make is mixing personal and business finances. It might not be a cause of concern when you are starting out, but as your business grows, this habit can turn into a financial doomsday.   

The solution is to open a dedicated business bank account. This ensures that all your cleaning business income goes into one place, and all expenses like supplies, payroll, fuel, or equipment are paid from the same account.   

It also simplifies tax preparation since you won’t have to go through personal transactions to separate business expenses.  

Here’s what you need to do:  

• Deposit all business income into your business checking account.  

• Pay all business-related expenses from the same account.  

• Avoid personal transactions in the business account. Instead, pay yourself a draw and transfer that money to your personal account for personal expenses.  

Speaking of business bank accounts, if you haven’t got one, Ramp provides corporate cards, and through it, you can pay bills, manage business expenses, send invoices, and so much more. Plus, it gives you a $500 sign-up bonus, thanks to our partnership with them. So, make sure to check out the link here.      

2. Setting Up Your Chart of Accounts  

Many cleaning business owners struggle with tracking where their money is going. Without a proper system in place, it’s easy to lose track of expenses, profits, and tax-deductible costs.   

That’s where a Chart of Accounts (COA) comes in. It’s a structured list of all the financial accounts your business uses to categorize income and expenses.   

When setting up your chart of accounts, create separate income and expense categories relevant to your cleaning business, such as:    

• Keep track of all client payments for services rendered. You can further break it down into residential, commercial, or specialized cleaning for better insights.  

• Categorize expenses for cleaning products, tools, and equipment maintenance to monitor spending trends.  

• Record wages, salaries, benefits, and payments to subcontractors to manage workforce expenses effectively.  

• Include costs for online ads, flyers, business cards, and website expenses to track your promotional efforts.  

• Keep tabs on business insurance, permits, and legal compliance costs to protect your business.  

• Organize office-related costs such as software subscriptions, utilities, and office rent for easy reference.  

• If you rely on a company vehicle for transportation, log expenses like fuel, maintenance, and auto insurance separately.  

3. Keep Tracking   

One of the biggest challenges for cleaning business owners is keeping track of payments, especially when dealing with multiple clients, late payers, and recurring services.   

To avoid this, establish a structured income-tracking process with these key steps:  

• Every job should have a corresponding invoice with detailed service descriptions, client information, dates, charges, and payment terms.   

• Compare your bank statements with your recorded revenue to catch missing payments, duplicate charges, or errors.   

• Store invoices, receipts, and payment confirmations in a digital or physical filing system.   

• Regularly check financial reports to assess profitability, spot trends, and identify top-performing services.   

4. Do Proper Recordkeeping  

Poor recordkeeping can create major financial blind spots, leading to missed tax deductions, errors in financial reports, and unnecessary stress during tax season.   

A solid recordkeeping system ensures that every dollar coming in and going out is properly documented, keeping your cleaning business financially organized.  

Here’s how to stay on top of your records:  

• Create a system to categorize and store receipts for supplies, equipment, vehicle expenses, and other business costs. Instead of hoarding paper receipts, consider using expense-tracking apps or cloud-based storage to keep everything accessible and organized.  

• Keep a digital or physical record of all invoices sent to clients. To maintain a clear financial trail, each invoice should include client details, service descriptions, dates, charges, and payment terms.  

5. Invest in Accounting Software  

You may have relied on spreadsheets and manual invoices, but now it’s time to change. As your client base grows, so does the complexity of managing your finances.   

This is where automated accounting software makes a difference. With an online system, you can:  

• Send invoices in minutes and streamline payment collection.  

• Track income and expenses automatically, reducing manual errors.  

• Generate financial reports to clearly understand your revenue, profits, and tax obligations.  

With tools like QuickBooks, FreshBooks, and Wave, you can manage all your business finances in one place while saving time and effort.

Should You Hire a Bookkeeper or DIY?  

As a small cleaning business owner, you must manage clients, staff, job scheduling, and maybe marketing. Adding bookkeeping to this can make it feel like you are doing a job, not running a business.   

So, let’s break down the pros and cons of hiring a bookkeeper vs. DIY:   

Hiring a Bookkeeper  

Pros	Cons
A professional bookkeeper understands accounting principles, tax regulations, and bookkeeping software, ensuring your records are error-free and compliant.	Hiring a bookkeeper is an added expense, which may not be feasible for small cleaning businesses with tight budgets.
Bookkeeping is time-consuming. By outsourcing, you can focus on growing your business instead of crunching numbers.	Since someone else manages your finances, you may not have instant access to financial data whenever needed.
A bookkeeper stays updated on tax laws and regulatory changes, helping you avoid penalties, audits, or legal issues.
Professional bookkeepers provide detailed financial reports to help you identify profit opportunities, cost-cutting strategies, and cash flow improvements.

DIY Bookkeeping  

Pros	Cons
If you’re running a small operation with minimal transactions, DIY bookkeeping eliminates the expense of hiring a professional.	Bookkeeping requires consistent data entry, reconciliations, and financial reporting, taking time away from running your business.
Since you’re managing everything yourself, you can quickly access and update financial records as needed.	Without bookkeeping expertise, mistakes in transaction recording, tax calculations, or reconciliations can lead to financial mismanagement or penalties.
By actively tracking income, expenses, and cash flow, you develop a deeper understanding of your business’s financial health.	Bookkeeping is more than just entering numbers—it involves understanding accounting principles, financial analysis, and tax laws. Without proper knowledge, you risk inaccurate financial reporting and compliance issues.

Final Thoughts   

We hope you didn’t take longer than 10 minutes, but if it did, it would have been worth it. With these bookkeeping practices, you’ll avoid costly mistakes, improve cash flow, and set your business up for long-term success.   

If you are stuck or hate to do bookkeeping, we have an option for you. Tangent Consulting has years of experience as a CFO, business coach, and tax consultant. With us, you don’t need to hire an accountant or business coach separately; you can get both in one place.                                                   

P.S. If you are reading this, it means you can have access to our free consultation for your business. Avail this for free today before we change our mind    

FAQs  

What is the best bookkeeping software for cleaning businesses?  

QuickBooks, Wave, and FreshBooks offer invoicing, expense tracking, and financial reporting tailored for small service-based businesses.  

How do you categorize cleaning expenses?  

For clear financial tracking, group expenses into categories like supplies and equipment, payroll, marketing, insurance, vehicle, and administrative expenses.  

What is the best bookkeeping method for small businesses?  

The accrual method is best for growing businesses, while the cash method works well for smaller operations that track income and expenses as they happen.