How to manage plumbing business expenses

When you run a plumbing business, you’ll have expenses necessary for your daily operations. So, you’ll need to be aware of the money you need to run your business and record expenses for tax reporting. But managing your plumbing business expenses may seem overwhelming if you struggle with organisation. Luckily, we can help.

This guide will discuss plumbing business expenses, including: 

• What expenses you’ll likely have as a plumber 
• How to maintain your cash flow to cover expenses
• How to stay on top of expenses for your bookkeeping 

You may need to manage a few expenses as a plumber. If you’re aware of these expenses, you can easily track them. These expenses could be fixed or variable, meaning they typically remain the same or shift from month to month. 

Fixed expenses for plumbing might include: 

• Car payments: If you lease, rent, or purchase your business vehicle using a loan, you may have monthly payments for it. 

• Insurance: Insurance is essential to protecting your business from financial risk, but it does cost regular payments. 

• Business software: You may pay for software, such as accounting or management tools, to help you organise and run your business. 

• Marketing and advertising: Your marketing and advertising costs include any money you spend to promote your plumbing business and find clients. For example, you have website hosting costs or paid advertising.

• Loan payments: If you borrowed money from a funding source to run or grow your business, you’ll likely pay this back with regular instalments.

Variable expenses for your plumbing business might include: 

• Fuel: You’ll need to commute from one plumbing client to the next, which means regular fuel costs, which will vary due to fuel prices and irregular client appointments each month. 

• Equipment and tools: You likely purchased the necessary plumbing equipment and tools when you started your business, but you may want to replace old tools or upgrade to new ones. Plus, you’re bound to face unexpected repair or replacement costs for lost or damaged tools. 

• Supply orders and parts: You may keep common supplies on hand for your plumbing jobs, and track how much you spend on these parts. Then, ordering unique parts may be essential to completing jobs. Though you’ll include these costs in your client invoice, you’ll need the cash to complete jobs before clients’ payment. 

• Taxes: Your taxes will differ depending on how much you earn from your plumbing business. Though this expense may only come about once a year, it’s good to plan ahead and set money aside. This way, you won’t have to scramble to find the funds to cover it.  

Once you know what plumbing business expenses you’ll need to manage, you can get an idea of the necessary cash flow. Your cash flow is the money that comes in and out of your business over a set time. 

For example, say you typically £200 a month on fuel, £500 on supplies and parts, and £100 on marketing, and £100 on insurance, and £200 on unexpected repairs. These expenses would put your business’s monthly costs around £1100 per month. 

Not only will you need to earn more than £1100 a month to earn a profit, but you’ll also need that much in cash to run your business. As a plumber, you may offer 14-30 days for clients to pay an invoice or offer smaller payments over time for your services. You won’t see the cash you earn right away with this delay. 

By following your cash flow closely, you can see where to cut spending on unnecessary costs and improve the speed at which cash comes into your business. For example, you may want to make a system to handle late-paying clients to ensure you make the money you earn. You could also ask for a cash down payment on larger jobs. 

With the right tools, you can manage your plumbing business expenses like a pro. First, you’ll need to set aside time each day to update your bookkeeping and track your fuel costs. Plus, you’ll want to keep a log of your business mileage, which you can claim as an expense on your taxes. Manage this easily with automated tools like MileIQ. 

To manage your spending, you’ll want to separate your business expenses from your personal ones. To do this, open a business current account if you haven’t already. A specific business account will save you time because you won’t have to shovel through your bank statements to find business transactions.

Aside from that, you’ll want accounting software like Countingup that helps you manage your business transactions for accurate record-keeping. Trusted by 40,000 business owners, Countingup is the two in one business account and accounting app that helps you manage your finances in one place. 

Countingup can simplify and speed up your expense management with tools like automatic expense categorisation. As you make payments, the app will label them for you using HMRC approved categories. This way, you can easily find tax-deductible expenses. Then, the receipt capture tool will remind you to snap a picture of your receipts whenever you make a purchase. No need for messy piles of receipts. 

On top of all this, the app generates cash flow insights to help you track how much cash you have to cover your operating costs. These handy tools will make managing your plumbing expenses like second nature. 

Financial management can be stressful and time-consuming when you run a plumbing business. That’s why thousands of business owners use the Countingup app to make their financial admin easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Start your three-month free trial today. 

Find out more here.