Accounting for Service Professionals: A Practical Starter Guide

Bookkeeping basics for contractors and trades — chart of accounts, cash vs. accrual, job costing, and the reports that tell you if a job actually made money.

Good books do more than keep you organized at tax time — they tell you which jobs, customers, and services actually make money. Here is a practical starting point for service businesses.

Set up a clean chart of accounts

Your chart of accounts is the backbone of your books. Keep it simple: separate income by the kind of work you do, and split expenses into meaningful buckets like materials, subcontractors, vehicle, tools, and overhead. Over-detailed accounts create noise; too few hide what’s really happening.

Cash vs. accrual

• Cash basis records income when you get paid and expenses when you pay them — simple and common for small trades.
• Accrual basis records income when you earn it and expenses when you incur them — a truer picture of profitability, and sometimes required as you grow.
• Seayora lets you set your accounting basis in policies; ask your accountant which is right for you.

Use job costing

Job costing ties income and costs to a specific job so you can see its true margin. Tag materials, labor, and subcontractor costs to the job, then compare against what you invoiced. Jobs that look busy but lose money are the ones job costing exposes.

Reports that matter

• Profit & Loss — are you making money overall?
• Balance Sheet — what you own and owe.
• A/R aging — who owes you and how late they are.
• Job profitability — which work is worth repeating.

This is general education, not accounting or tax advice — confirm specifics with a qualified professional.

Frequently asked questions

Do I need an accountant if I use software?

Software handles the day-to-day, but a professional helps with setup, tax strategy, and year-end. Many owners do their own bookkeeping and bring in an accountant quarterly or at tax time.

What is job costing in plain English?

It’s tracking the money in and out for each individual job so you can see whether that job made a profit — instead of only seeing your business’s total at the end of the month.