The Ultimate Guide to Accounting for the Landscaping Business  

Have you been to a sandwich shop recently? We have! We stared at the menu, deciding which one to eat. There were plenty of options, but we finalized classic club, avocado toast, and the mysterious special of the day. We couldn’t decide which one to eat for at least 15 minutes, and at last, we picked the classic club sandwich.   

Running a landscaping business can be like choosing the right sandwich. The finished product can look simple, but what goes on behind the scenes (planning, budgeting, operating) can be complicated.   

Just like a great sandwich relies on the right ingredients, a solid landscaping business follows strong accounting practices.   

If you haven’t thought of accounting for the landscaping business yet  

a. You need to start thinking about it asap  

b. Stick with us for the next 10 minutes, as we are going to talk about why you need accounting and some of the tips you can use for your landscaping business.   

Why You Need Accounting for the Landscaping Business?  

We know managing finances can be challenging for any landscaping business. However, many businesses prioritize designing outdoor spaces and executing physical projects, while finances often take a backseat.   

It’s not that business owners don’t recognize the importance of accounting; they simply lack the time to record every transaction, calculate job costs, and ensure tax compliance amidst their daily grind. That’s why 60% of small businesses admitted struggling with cash flow management.   

Side Note: If you want to dig deeper into cash flow problems, you can check out our detailed guide here.   

If you are having cash flow problems, isn’t it helpful to analyze your company’s activities? This can help you understand where your business stands financially so you can make the necessary changes.   

Without proper accounting for the landscaping business, it’s nearly impossible to identify the cost of materials as a percentage of your overall expenses.   

5 Tips to Improve Accounting for Landscaping Business  

Think of your landscaping business as a garden and accounting soil. It keeps everything rooted (if you know what we mean 😉). If you ignore it, weeds like cash flow problems or tax mismanagement can appear.   

Let’s see how you can improve your accounting.   

1. Separate Business and Personal Expenses  

If you want to start your accounting right now, start by setting up a dedicated bank account. Deposit all business income into this account and use it exclusively for your expenses. In addition, consider having a credit card for business-related purchases.   

If you are looking to open a business bank account, we have partnered with Ramp to give you a $500 free signup bonus. You can sign up here.    

This practice not only keeps your personal and business finances separate but also provides a clear picture of what your landscaping business is spending. It also minimizes the risk of accidentally mixing personal and business expenses, making your bookkeeping and tax preparation much smoother.  

2. Track Everything  

It’s important for landscaping business owners to report all earned income to the IRS or CRA (if you are in Canada) to avoid audits or tax reassessments for unreported income.   

The good thing is when you track everything, you can deduct your business expenses from your income, which reduces your overall tax liability. If you’re not tracking every expense, you risk paying more taxes than necessary.   

Pro Tip: While your bank statements can provide some insight, using dedicated accounting software like QuickBooks is a smarter option. It keeps your records organized, simplifies tracking, and ensures no expense gets overlooked.  

3. Understand Tax Deductions  

We touched on tax deductions above, but the most common question we get from our clients is, “What tax deductions can I claim?” This is also one of the most important questions landscapers should ask when managing their business finances.   

According to the IRS, businesses can deduct all ordinary and necessary expenses.  

For any landscaping business, this opens an array of deductions that can significantly reduce your tax liability. Here are some common examples:  

• Vehicle Expenses  

• Labor Costs  

• Depreciation  

• Advertising  

• Insurance  

• Professional Services  

• Rent or Lease Costs  

• Repairs and Maintenance  

We must point out that deductions can vary depending on the specifics of your landscaping business. Consulting with a professional accountant ensures you’re claiming all available deductions.  

Additionally, investing in the right tools can be helpful in tracking these deductions. For example, QuickBooks can help you monitor expenses while tracking mileage.   

4. Do Proper Reporting  

Accurate and timely reports are essential for making smart business decisions. You need to create detailed reports such as profit and loss statements, accounts receivable, cash flow analysis, and more. These reports give you actionable insights to guide your decision-making process.  

Take a cash flow statement, for example. It highlights when you’ll likely have surplus cash, helping you decide the best time to invest in new equipment. Similarly, an accounts receivables report shows which invoices are still unpaid, ensuring nothing falls through the cracks.  

With the right reports, you can monitor whether your expenses align with your revenue, identify projects with the highest profit margins, and even pinpoint which neighborhoods bring in the most business.   

We dig deeper into financial statements and reports, so make sure to check them out here.   

5. Manage Tax Obligations  

Taxes are a key part of accounting for the landscaping business. This includes preparing quarterly estimated tax payments and filing annual returns. If you neglect these obligations, it can result in penalties, fines, and even legal complications.   

By understanding your tax requirements and planning, you can avoid unnecessary stress and ensure your business complies with the tax laws.  

Should You Hire a Pro?   

So you got to know why accounting is important for any landscaping business. The question now is, should you hire a pro?   

If you are new and have a limited budget, you can do accounting yourself. You can find tons of resources that can guide you on every topic. You can check out our blog every Monday, Wednesday, and Friday for accounting and tax basics.   

In addition, if you have a small budget, you can get QuickBooks or Jobber. These tools can help you automate the accounting process, and you don’t require any special technical skills to operate them.   

However, as your business grows, so does the complexity of its finances. At some point, you’ll decide: should you continue dedicating time/using software or focus on crafting exceptional lawn designs and hire a pro?  

Hiring an experienced accountant or CPA can be a game-changer for your business. They don’t just manage your capital—they free up your time so you can concentrate on the aspects of your business. They can help you with tax prep, analyzing financial trends, and providing you insights that help you make informed decisions.   

Final thoughts  

So, there you have it. You need to manage your finances if you want to play the game a little longer, and accounting can help you get there. As your business scales, don’t hesitate to bring in a professional to handle the complexities of your finances. Hey, you don’t need to know everything about accounting.   

Speaking of bringing in a pro, Tangent Consulting has years of experience as a fractional 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 landscaping business. Avail this for free today before we change our mind 😉    

FAQS  

Which is right for your business, bookkeeping or accounting?  

For any business, accounting and bookkeeping are essential. Bookkeeping records daily transactions, while accounting interprets that data for decision-making.   

Why do companies outsource bookkeeping and accounting?  

Outsourcing saves time, reduces costs, and provides access to professional expertise. It allows businesses to focus on growth while ensuring accurate financial management and compliance.   

How to properly quote a landscaping job?   

First, you need to assess the project scope, calculate material and labor costs, and add a profit markup. You also need to consider equipment usage, travel time, and unexpected expenses.