# Cleaning Business Finances
# Accounting
Keeping good records of your finances will be crucial in becoming a profitable business. Record keeping can sometimes feel like a major task. You will need to be organized and you will also need to use accounting software to assist you with this. Quick Books is the most popular but Wave is becoming a popular choice for entrepreneurs. These platforms help you mange all aspects of your finances including invoicing and payroll.
All expenses will need to be tracked for tax purposes. I recommend that all receipts are immediately scanned to your computer for safe keeping. It is easy to loose receipts.
Find a good Certified Public Accountant. They can advise you on any financial or tax questions you have. Some will also set up your accounting software.
# Invoicing
Most clients will want to pay the invoice 30 days from the time they receive the invoice. It is important to send the first invoice the same day you start the service. This will insure you get paid on time.
You should always include the late fee amount on the invoice to remind the client that they will be billed for being late. You may feel compelled to not add it when they are late. However, you will need to be paid on time to meet your financial obligations such as payroll. Clients tend to use excuses as to why they are late such as processing. You must remember that they don't except your excuses for poor service.
# Wages
Your wages will have to be thought out. They are typically 50% -80% of your expenses. It is in your best interest to pay more than minimum wage. You will be competing against other organizations that can pay more and give benefits.
Your pricing should reflect your labor cost and yearly wage increases. It is wise to include a yearly contract increase of at least 2.5% to cover the wage increases.
# Timekeeping
It is very important to develop a system of tracking your employees time. You want to pay them for when they work and avoid overpaying them when they don't work.
There are several timekeeping apps available that have GPS verification of when the employee is at the location. TSheets is by Quickbooks and has the features you need. You will still have to monitor this process by frequently checking the work site for employees after they clock in. You may also have to provide mobile devices for employees if you want to monitor their locations during work. These cost will need to be considered when bidding on jobs.
# Payroll
Employees expect to be paid each week and don't want excuses that the client did not pay yet. Usually this will be the beginning of employee turnover. When you start a new client you will need to have the at least the first month and a half of payroll. You will not get paid until the end of the first month.
It is in your best interest to have all employees use direct deposit. Delivering checks can be a pain if you have a lot of employees. Also pay bi-weekly. This will decrease your payroll processing fees if you are using a payroll company.
Using payroll companies such as Quickbooks and ADP can save time and help eliminate errors in payroll. They also handle paying your payroll taxes. The cost is definitely worth it.
# Reinvesting
Once you become profitable it is very important to build up cash in the bank to start new contracts. You will also need funds for marketing. This is the biggest mistake most new janitorial companies make. You won't be able to take on new clients without cash in the bank or access to additional funds.
The cleaning business has a low barrier to entry due to the low start-up cost. Many new entrepreneurs want to quickly reap the benefits of the profits instead of reinvesting those funds for continued growth. Do yourself a favor and come up with a comfortable percentage of profits from each client to reinvest. This will make it more manageable and you wont feel like your are not paying yourself.
# Growing
The cleaning contracts can go from $300 a month to $20,000 plus a month. It is easy to want to start with those big contracts. If you are just starting the truth is you are not ready for these clients. Once you need 5 plus employees on site you will feel the pain early on. Start small and grow steady. Learn how to manage multiple locations on a small scale with limited employees first. Growing too fast usually kills many janitorial companies.