Tracking Equipment, Fuel and Crew Costs in a Landscaping Company

What landscaping books need to track

A landscaping job is not one number. It is a mix of mower hours, fuel card swipes, crew time, materials and truck use, all spent on one job before the check comes in.

Your books need to track all of that by job. When you do, you can see which jobs paid and which ones cost more than they brought in. When you do not, you get one big pile of costs and one big pile of income, and no way to tell which lawn was the good one.

Most weeks a crew runs two or three jobs a day. The truck burns fuel on every trip. The mowers rack up hours. The crew earns wages for the time on site. Some jobs are weekly cuts. Some are one time cleanups. Each one needs its own lines so the profit per job is real.

Here is what a clean job looks like.

When each line ties to the job, your profit per job is real. When the lines sit in one account, you can not tell which job made money.

How equipment time shows up in your books

Equipment is the mowers, the blowers, the trimmers and the skid steers. They cost money two ways. You bought them once, and they wear out every hour you run them.

The clean way is to track equipment hours by job. When a mower runs for two hours on job one, those two hours go to job one. At month end, you can see what each job cost in equipment time. You can also see when a mower is due for service, because the hours add up.

The messy way is to ignore equipment hours and just pay for the machine once. Now every job looks free on equipment, and the real cost sits where no one can find it. The next bid is built on numbers that do not show what the job really cost.

Equipment also wears out. A mower does not last forever. The cost of the mower spreads out over the hours it runs, so each job pays a little piece of it. Your CPA can help you with the yearly entry for that. We book it on schedule so your balance sheet stays right.

Here is how to keep equipment hours clean.

• **Track hours by machine: ** each mower and blower gets its own hour count.
• - **Tag hours to the job: ** the time on site lands on the job it was used for.
• - **Flag service at set hours: ** when a machine hits its service mark, it shows on a list.
• - **Book the wear on schedule: ** your CPA gives the yearly entry and we book it.
• - **Keep repairs by machine: ** a repair bill ties to the machine it fixed, not to one job.

When equipment hours tie to the job, you can see if your price covers the machine time. When they do not, you are guessing.

How to track fuel by job and by truck

Fuel is the gas card swipes. Every fill up at the pump is a cost. The question is which job that fuel served.

The clean way is to tie each fuel card swipe to the truck and to the job. A crew fuels up at the start of the day, drives to job one, then job two, then job three. The fuel for the whole route splits across the jobs it served. Even a rough split is better than no split at all.

The messy way is to book every fuel swipe to one fuel account and forget the job. Now the fuel cost is real, but no one can tell which jobs ate it. A job that was far away looks as cheap as a job next door.

Fuel costs swing with the season. The summer mowing weeks burn more gas than the winter prune weeks. When you track fuel by job and by month, you can see the swing and plan for it. You can also see when a truck is burning more gas than it should, which can mean a tune up is due.

Here is how to keep fuel clean.

• **Tie each gas card swipe to the truck: ** the card knows which truck fueled up.
• - **Split a route across the jobs: ** even a rough split by time on site beats no split.
• - **Watch the monthly total: ** a big jump can mean a price hike or a truck that needs work.
• - **Reconcile the fuel card statement to the bank: ** what you paid should match what cleared.
• - **Keep fuel out of overhead unless it serves every job: ** shop fuel is overhead, job fuel is a job cost.

When fuel ties to the job, you can see if your route pays. When it sits in one pile, the far away jobs look cheap and the close ones look expensive.

How crew labor ties to the job

Crew labor is the wages you pay the crew. It is the biggest cost on most landscape jobs. It is also the one most owners get wrong in the books.

The clean way is to track crew time by job. When a crew spends two hours on job one, those two hours go to job one. When you run payroll, the wages for that time land on the job. You can see what labor cost on each lawn.

The messy way is to book all crew wages to one labor account and forget the job. Now every job looks the same on labor, and you can not tell which crew is fast and which one is slow. You can not price the next job right because you do not know what the last one cost in labor.

Crew time also includes the drive time between jobs. A crew that drives thirty minutes between jobs burns labor on the road, not on the lawn. When you track time by job, that drive time shows up. You can see if your route is tight or if you are paying the crew to sit in traffic.

Here is how to keep crew labor clean.

• **Track crew time by job: ** start time and end time on each job.
• - **Include drive time in the job: ** the time on the road is part of the job.
• - **Run payroll and tie it to the job: ** the wages for the time land on the job.
• - **Compare crews on the same kind of job: ** see which crew is faster.
• - **Watch the labor percent per job: ** if labor eats more than half the price, the job is too cheap.

When crew time ties to the job, you can see if your labor rate pays. When it sits in one pile, you are guessing.

How overhead stays apart from job costs

Not every cost belongs to a job. Some costs keep the business running. The shop rent. The truck payment. The insurance. The software you use to run the routes. These are overhead, and they do not belong on any one job.

When overhead lands on a job, that job looks too expensive. When job costs land in overhead, the job looks too cheap. Both make your profit per job wrong.

The rule is simple. If the cost is for one job, it goes on that job. If the cost is for the whole business, it goes to overhead. You can see overhead on the profit and loss report in its own section. Job costs show inside each job.

Here is the line between the two.

• **Job cost: ** spent for one job, such as mulch for the Maple Street cleanup.
• - **Overhead: ** spent for the whole business, such as the shop rent.
• - **A truck used on every job: ** overhead, unless you track it by job, and most small landscapers do not.
• - **Fuel for the shop mower: ** overhead, because it serves the whole business.

How the month end close works

At month end, every job needs its costs added up. The equipment hours, the fuel, the crew labor and the materials all pull together into one job total. The income for the job sits next to it. The difference is the profit for the job.

We start with the bank. We match each fuel card swipe to the bank payment. We match each crew pay run to the bank. We tie each line to the job. We add up the equipment hours and the labor hours. Then we add up the job. We send you the profit and loss report and a balance sheet. The job totals sit inside the report.

Here is a simple month end check.

• **Match the fuel card statement to the bank: ** every swipe cleared.
• - **Confirm each fuel swipe ties to a truck: ** no orphan gas.
• - **Confirm each crew shift ties to a job: ** no orphan labor.
• - **Add up the equipment hours per job: ** mower and blower time on the right lawn.
• - **Compare the job total to the income: ** the gap is the profit per job.

A situation we clean up

The fuel card that hid the far away jobs

A landscaping company runs three trucks and five crews. Every gas card swipe lands in one fuel account. Every crew wage lands in one labor account. No cost is tied to a job. At month end, the books show a big fuel cost, a big labor cost, and forty jobs with no clear profit. The owner can not tell which lawns paid and which ones cost the company.

Here is how we handle it. We pull the fuel card statements for the month. We tie each swipe to the truck that fueled up. We look at the route sheets and split the fuel across the jobs each truck served. We pull the crew time sheets and tie each shift to the job. We run the payroll and land the wages on the right job. When we are done, the owner can see the profit on each lawn and the true cost per route. The far away jobs show their real fuel cost for the first time. We set up a simple rule so the next fuel swipe and the next crew shift land on the right job from the start.

Mistakes we fix

• Fuel card swipes booked to one fuel account with no truck tag
• Crew wages booked to one labor account with no job tag
• Equipment hours never tracked so every job looks free on machine time
• Drive time left out of the job so the labor looks low
• Overhead dumped onto one job so that job looks too expensive
• Job costs dumped into overhead so the jobs look too cheap
• No reconciliation between the fuel card statement and the bank
• Materials booked to one supplies account with no job tag

Common questions

Do I need to track equipment hours? Yes. When you track hours by machine and tie them to the job, you can see what each job cost in machine time. You can also see when a mower is due for service. Without it, every job looks free on equipment.

How do I split fuel across jobs on a route? Tie each gas card swipe to the truck. Then split the fuel across the jobs that truck served that day. Even a rough split by time on site beats no split at all. The point is to keep the far away jobs from looking as cheap as the close ones.

Do I include drive time in the job? Yes. The time a crew spends driving between jobs is part of the job it serves. When drive time shows up, you can see if your route is tight or if you are paying the crew to sit in traffic.