As you can imagine, starting a home, commercial, or industrial plumbing business can be challenging. In addition to difficult working conditions, you must deal with long hours, emergency calls, long commutes, strict regulatory requirements, and ongoing training. While customers expect you to unblock toilets, unclog pipes, and fix hot water supplies, your financial planning often doesn’t get the attention it deserves. Below, we will talk about how to ensure proper accounting for plumbers.

Leveraging Technology for Efficiency, Customer Satisfaction, and Saving Time

In the 21st century, plumbing organizations use advanced digital solutions to save time and assets and provide a flawless customer experience. Let’s look at the main tools to provide financial health for your firm:

  • Mobile invoicing apps: Permanent control of invoices and payments can be a daunting task, given the many worries of the plumbing organization. Invoicing requires specialized applications or accounting attainments, which can be long and tedious. This is where mobile invoicing becomes indispensable. It will save you time and let you receive payments instantly by issuing bills from your gadget.
  • The adoption of GPS applications: GPS tracking lets you monitor the location of your specialists, map out efficient routes, generate timetables, and control progress to ensure your staff is utilizing their working hours productively. GPS fleet control allows you to improve many operational procedures, including dispatch, reserve control, and automation, which let you operate and expand your plumbing organization efficiently.
  • CRM management system usage: The customer relationship management system optimizes interaction with counterparties and positively impacts the quality of service provision and business operations. It is a virtual center that collects, systematizes, and processes client information. Such systems capture client interactions across multiple sources, giving plumbers a holistic view of user behavior and needs. They allow the monitoring of service history and ensure that each plumber is aware of previous cooperation to provide individualized service.

The active development of artificial intelligence and other advanced approaches will ensure even greater client satisfaction and efficiency of accounting for plumbers in the future.

Accrual vs. Cash Basis Accounting: Which is Better for Plumbers?

When launching a plumbing firm, choosing between the cash and accrual methods can be challenging. They suggest different perspectives on your organization’s financial prosperity.

The cash method is based on your organization’s cash activities. You record revenue when clients give you money and expenditures when you buy parts, pay wages, etc.

The main advantage of this system is its simplicity. It takes into account only the real change in the amount of capital and simplifies cash management.

Under accrual accounting, capital is recorded as it is received. In other words, this approach requires income tracking when performing plumbing work, regardless of when the funds arrive in business accounts. Likewise, expense recording occurs before capital is paid out.

The accrual method provides high accuracy in displaying finances. This gives a clear picture of financial obligations and resources. It is an excellent solution to handle debt, profit, and commercial activity.

The main disadvantage of such a system is that it requires more complex bookkeeping for plumbers and that they must strictly follow the rules.

Understanding the Cost of Goods Sold (COGS)

The lifeblood of a plumber business is the profit obtained from the consumer. If your business offers prepaid services and invoices you later, keeping accurate records and following up with clients who don’t pay is essential.

Expense control in the bookkeeping for plumbers includes two main elements: work and repair parts; let’s look at them in more detail:

  • Repair parts costs: When purchasing parts, you must specify the price and where you purchased them. This will allow you to charge appropriately for the part and provide proof of costs to get deductions during tax preparation. We recommend monitoring the prices of the most popular items from different providers to track price fluctuations throughout the year.
  • Labor costs: When it comes to the workforce, everything is simple if your organization employs one specialist because you need to control one person’s time. However, if you hire more specialists, it is essential to clearly record working hours with particular time cards. These time cards demonstrate which employees are the most productive and provide data on business expenditures when calculating wages and other mandatory payments.

Costs and profit tracking are vital components of fair pricing in your organization.

Accounting for Plumbers: Streamlining Finances for Plumbing Businesses

Determining Your Business’s Pricing

The two most commonly utilized pricing strategies are hourly and flat rates. Depending on your situation, you may select one option over the other or combine them.

Hourly rate (working hours and materials)

The hourly pricing algorithm involves billing clients at a rate that includes time and resources. The entire cost of the job depends largely on how much time you spend on the job.

Hourly rates may attract some clients because they may find the payment more transparent. The itemized billing document shows the client the hourly rate and material expenditures, but the client also looks at the hours worked.


This pricing model considers labor, materials, and overhead expenditures to form the value. The client pays a flat rate no matter how long it takes to finish.

This system will allow you to offer many plumbing services that a consumer can add to a bid. You also won’t have to create an estimate before starting each new project, and you can spend that time on more valuable work.

Choosing a flat rate in the plumbing organization will also give the client an idea of how much they must pay once the job is finished. You realize exactly how much profit you may obtain from each completed project.

Many companies today utilize a hybrid pricing structure to get fair prices without decreasing revenues and get you closer to your income goals. Some specialists apply hourly rates when performing large, sophisticated jobs and offer fixed payments when you do more straightforward procedures.

Insurance and Risk Management and Associated Costs

A robust plumbing insurance policy combines various kinds of small firm insurance to help protect your organization from multiple risks in asset management. This policy covers everything from legal issues to business assets. Let’s talk about them in more detail:

  • General liability insurance: This policy covers accidental property damage and bodily injury to persons who are not your workers.
  • Commercial property insurance: It covers your office and equipment if it is stolen or destroyed due to a situation listed in your contract.
  • Workers’ compensation insurance: The policy covers your staff’s medical bills, lost revenue, and other expenses if they get injured or become sick while performing work-related tasks.

Plumber insurance costs depend on many factors, including the type of coverage, the organization’s location, the number of workers, and the annual revenue.

Implement Strong Expense Control Measures

Running an organization comes with its associated costs. You can track expenses without problems if you display them in business statements. These spending are either fixed or variable, meaning they are stable or change in different periods. Fixed costs may include:

  • Automobile payments if you lease or buy a vehicle on credit.
  • Insurance to save your organization from financial risks.
  • Purchasing software to provide accounting for plumbers or business management.
  • Marketing and advertising costs include any expenditures associated with promoting your organization and finding counterparties.

If you borrow capital from a bank, you will likely have to repay the loan in regular installments.

Let’s look at the main categories of variable expenses:

  • Fuel: You will have to travel from one client to another, which means permanent fuel costs that vary depending on prices and the number of client visits.
  • Equipment and instruments: You probably purchased equipment and instruments when you launched your organization, but over time, you may be able to replace old models with more advanced ones or fix them.
  • Purchase Orders and Parts: You must control regular supplies to provide repair work and monitor how much you spend on parts.
  • Taxes. Your required payments will vary depending on your earnings.

You should adopt cash flow analysis to identify areas to cut expenditures and increase the cash flow to your organization.

In addition, implementing budgeting plumbing is a vital bookkeeping practice in business. It allows you to handle finances effectively, plan future spending, and achieve your financial goals.


As a plumbing organization owner, you must do many things simultaneously. Something always requires your attention, from handling projects and ensuring high-quality service to keeping up with the actual trends. Add in bookkeeping and tax preparation, and you can see why entrepreneurs in this industry often feel overwhelmed.

BooksTime specialists understand the plumbing business pitfalls, and having a financial professional who knows the ins and outs of the field can mean the difference between basic survival in the marketplace and continued prosperity. In addition to standard aspects of compliance with all legal requirements, our experts help clients work with their cash flows and select the appropriate software to provide invoice tracking and managing personnel.