Commercial lawn care is a business and the IRS (Internal Revenue Service) requires that you report your net ordinary income and pay self-employment taxes on that income at least quarterly. Net ordinary income is what is left after you subtract ordinary expenses such as gas, oil, parts, belts, insurance premiums, employee expenses, etc.

If you have employees you must either higher them as contractors making them 1099 employees or pay their income taxes, Social Security and Medicare taxes.

That sounds like a lot of paperwork and it sounds intimidating. Anytime anyone says “IRS” I know I feel intimidated.

How do you keep track of all this stuff without losing your sanity?

It’s not as hard as you think. There are several computer-based software packages that can track all this for you and all you have to do is enter the information accurately and correctly. I use Quickbooks by Intuit because you can start very small with it and as your business grows, you can upgrade to more advanced versions and add packages as needed.

If you are just starting out, you can begin with Quickbooks Simple Start. It contains the essentials of bookkeeping; managing sales revenue, customers, employees and expenses in an easy format to learn and use while maintaining real accounting records so you can file your quarterly and annual tax returns properly. At a cost of under $100, it is a great bargain. Pros: it is easy to learn and use. Cons: it only runs on Windows-based PCs. I’m sure Intuit will make a Mac version if they get enough requests for it.

Once your business grows, you need to upgrade to Quickbooks Pro. This software package runs on both Windows PCs and Macs. It will import all your information from Simple Start and is much more powerful. It does everything that Simple Start does plus:

• Handles paying employees, bill tracking, invoicing and writing checks
• Keeps track of sales revenue and expenses
• Allows you to import data into Microsoft Word or Excel
• Let’s you stay on top of things by showing you who owes your money and what bills are coming due
• Has over 100 built in reporting templates
• Let’s you create professional grade custom forms
• Track vehicle and equipment depreciation

Quickbooks Pro costs under $200 and is well worth the price. Other packages can be added to it (for some extra money) to accept credit card payments directly, process an unlimited number of employees payroll and manage invoices.

Personally, I use Quickbooks Pro. My accountant recommends it, and when I started my business they hadn’t created the Simple Start edition yet.

Once you’ve been around the block more than a few years and you’re making enough to higher two or more office workers, you can upgrade to Quickbooks Premier Contractor Edition or Industry Specific Edition. Accounting software this powerful isn’t really necessary unless more than one person needs to be able to work on the company’s file at the same time. You would also want to control who can use the file and how much of it they can access, and this package allows you that kind of control.

I don’t have any employees and I enter my own data, so I don’t need this much power. I don’t plan to grow my company to the point where I would need this much power either, but you may want to do it.

Regardless of the size of your company, you must keep track of expenses, revenue and taxes so you need at least Quickbooks Simple Start. Some people use Quicken Home and Business or Quicken Premier, but those are not accounting software packages. They are money tracking packages and reports generated using them could result in an IRS audit because they don’t prevent you from deleting accounts and entries. Quickbooks won’t allow you to delete things that standard accounting rules don’t allow and your accountant will be much happier with you.

How do you get rid of the mistaken entries you make and closed checking and other accounts? You make entries to reverse the mistaken entries and you zero out closed checking and savings accounts. The software keeps track of them because they were used for past transactions. This may seem trivial until the IRS comes knocking on your door wanting to see all your records. They have an expectation that even if you don’t know bookkeeping you should either higher a bookkeeper or use a software package to keep your books for you.

Let’s review:

• You need an IRS acceptable way to keep track of your business finances
• Start with Quickbooks Simple Start
• Upgrade to Quickbooks Pro (or you can start here)
• If you have a larger business with multiple file users, upgrade to Quickbooks Premier Contractor’s Edition or Quickbooks Premier Industry Specific Edition
• If you refuse to keep up with your expenses and revenue yourself, higher a bookkeeper
• If you use Intuit TurboTax to do your taxes, all Quickbooks editions allow data to be extracted from your company file directly into TurboTax
• Other tax software may also allow you to import data directly from Quickbooks; just read the box to determine compatibility
• If you don’t do your own taxes higher a CPA

That’s commercial lawn care business bookkeeping in a nutshell. If you have any questions or thoughts please leave them in the comments below.

Technorati Tags: bookkeeping software, Commercial Lawn Mowers, expense tracking, Quickbooks, sales tracking

Commercial Lawn Mower’s blog is about commercial lawn mowers and commercial lawn mowing, or in other words, the business and the machines of a lawn service company. It’s also for those individuals who have a huge amount of area to mow and for those who want to buy or sell an existing lawn mowing business.

Why go into the lawn mowing business? There is a lot of money to be made for the amount of time you spend working. The lawn care industry is a $17 billion industry. There are a large number of potential clients including residential homes, hospitals, apartment complexes, business parks, golf courses, and shopping malls that require lawn maintenance.

Let’s talk about your slice of that $17 billion pie. If it takes you 30 minutes to mow, trim and edge a standard suburban yard, you charge $50 per yard and you mow 10 yards in a day, you earn $500. In my neighborhood the going rate is $60 for our lawns, so 10 lawns in a day would make you $600.

If you only worked on Saturdays 48 weeks of the year mowing 10 yards for $50 each, you would earn an extra $24,000 in a year. That’s nothing to sneeze at. Let’s compare that to a non-professional full-time job. If you worked a full-time job for $10 per hour 40 hours per week for 50 weeks a year, you would earn $20,000.

If you ran your commercial lawn mower business 5 days a week, 48 weeks a year and cut 8 yards per day for $50 each, you would earn $96,000 before taxes.

Being a commercial lawn mower is a good business to have part-time to supplement income or a great business to have full-time if you want to work for yourself and really enjoy the outdoors. Many areas of the country require mowing during 3 seasons. Here in the south we mow all 4 seasons. Although we mow less during the winter months, we still have to mow if the weather stays warm.

How does one get into the commercial lawn mowing business? There are several guides available, but the best starter guide I’ve found is How to Make Big Money Mowing Small Lawns.

Another good guide is from Entrepreneur’s Magazine Startup Series entitled Start Your Own Lawn Care Business.

This must-have step-by-step guide will show you:

• How to target your market
• What equipment you’ll need
• How to hire and manage employees
• Record-keeping and accounting
• Where to find working capital
• How to estimate jobs
• And more

If you’re able-bodied and enjoy working outdoors, you owe it to yourself to get the inside scoop on earning a great living working for yourself and setting your own work days and hours.

Get your copy of How to Make Big Money Mowing Small Lawns today!

Technorati Tags: Commercial Lawn Mowers, garden, landscape, lawn, lawn care business guide, make big money mowing small lawns, mowing, resource book, start your own lawn care business, yard

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