As the owner of a weekly pool care business, maintaining crystal clear water is not your only responsibility. You also need to ensure that your business is making a profit. Now that January is over, it’s essential to have a checklist to help you review your business’s financial and operational performance. This not only aids in keeping your business on track but also ensures that you’re ready for the month ahead. Below is a recommended list of end-of-month processes tailored for your pool care business.
1. Review Financial Statements:
Start by reviewing your financial statements, with a focus on the profit and loss (P&L) statement. Check that all revenues and expenses are accurately categorized. For example, when reviewing my 2023 P&L, I found six commercial auto insurance expenses lumped into the business liability insurance category in the chart of accounts. This made it look like my liability insurance premium had increased dramatically but after careful examination I found I had categorized many of the expenses incorrectly. Reviewing your P&L monthly helps you identify any areas where you can cut costs, increase revenues or manage your categories and make any corrections that are needed. This is much easier to do monthly in QuickBooks prior to accounts being reconciled.
2. Calculate Profit Margins:
Once your P&L statement is in order, calculate your profit margins to assess the financial health of your business. This involves determining the percentage of revenue that turns into profit after accounting for all expenses. A healthy profit margin means your business is on the right track, while a narrow profit margin could indicate the need for strategic adjustments aka budget cuts!!
Did you know QuickBooks Online can do all this for you just by clicking on reports. That is if you had QuickBooks online and were keeping up to date on your bookkeeping.
3. Assess Accounts Payable and Receivables:
Check that all accounts payable are settled to maintain good relationships with suppliers and avoid late fees. I do not have any open accounts. I pay for everything using my Southwest Travel Rewards Card. I enter the expense into my QuickBooks online app and take a picture of the receipt or invoice. I do not keep any paper copies. This saves a ton of time bookkeeping on the weekends.
Concurrently, follow up on accounts receivable to improve cash flow. Keeping on top of these accounts helps in managing your businesses liquidity and can prevent financial strain. As far as customer payments, in my pool care business I set up recurring invoices in QuickBooks to be emailed on the first of every month. QuickBooks is also set up to automatically send out reminders for any open invoices on the 16th of the month. On my monthly invoices I have a list of preferred payment terms. They are as follows…
1. Set up AutoPay on the 1st.
2. Payment between the 1st and the 10th.
3. Please make sure the invoice is paid at least 3 days prior to the end of the month so the deposit is made in the same month the services were provided.
If any customers get close the last week of the month, I do send out another reminder and a text. I don’t like carrying over any open accounts. If any invoice is not paid I stop providing the service until the open invoice is paid. This is why billing in advance is the best way to handle invoicing.
4. Inventory Management:
Conduct inventory checks on chemicals, parts, cleaning equipment, and other pool maintenance supplies. Reorder stock as necessary to avoid service disruptions. Proper inventory management can also prevent overstocking, which ties up cash and storage space. I just conducted an inventory check and put together a box of parts I recently purchased that can now be returned freeing up cash for future purchases.
5. Examine Operational Efficiency:
Analyze your service routes and scheduling to ensure that you are operating at peak efficiency. Look for opportunities to reduce travel time between jobs, which can save on fuel costs and allow you to serve more clients. I am having to make adjustments to my Thursday and Friday routes. I’ve noted excess travel times on Fridays and by moving some pools around I will save a ton of drive time between pools. Make these changes sooner than later.
6. Check Equipment Maintenance:
Especially your vehicle. I see pool trucks rusted out and barely hanging on. All while those trucks are full of hazardous chemicals. Accidents waiting to happen. Create and maintain maintenance logs for your vehicles. Regular maintenance can prevent costly breakdowns and service interruptions not to mention the strain on your profits when it comes to your vehicle being stuck on the side of the road.
Ensure you or your staff are up to date on your processes, pool care techniques and safety protocols. Do you have a process for an acid or chlorine spill in your truck? Continuous training can improve service quality and reduce the risk of accidents.
8. Plan for the Upcoming Month:
Lastly, set goals and create a plan for the upcoming month. This could involve launching a new marketing campaign, targeting a new neighborhood, offering a seasonal promotion, or creating a referral program.
By following these end of month processes, you can keep a close eye on the financial and operational aspects of your weekly pool care business. Regular reviews and proactive management put you in charge of your business. These are critical to ensuring your business stays afloat.
Want to know more about how QuickBooks Online can help take your business to the next level? Read my article below.
Have I missed anything? Please comment below with your end of the month processes and reports. I look forward to hearing from you. Let me know if you’ve found this and other articles helpful, useful or valuable. I would like to know how you’ve incorporated this list into your pool care business.
See you next time!