Tracking Parts and Truck Stock in a Plumbing Company's Books

What plumbing books need to track

A plumbing job is not one line in your books. It is a mix of parts, labor and truck use, all spent on one job before you get paid for it.

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 fittings and one big pile of labor, and no way to tell which job was the good one.

A job uses pipe, fittings, valves, fixtures and rough materials. Most jobs use a tech for the labor. Many jobs pull parts straight off the truck. Some jobs need a special order part that comes from the supply house for that one job. Each piece needs its own line on the job.

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 supply house bills show up in your books

The supply house is where most parts come from. You send a tech to pick up pipe, fittings, valves and fixtures. You get a bill for each pick up. That bill is a job cost.

The clean way is to book each supply house bill to the job it was bought for. The pipe goes to job one. The valve goes to job one. The fixture goes to job one. When the job is done, you can see what it cost in parts.

The messy way is to book the whole supply house bill to one parts account. Now job one looks cheap, job two looks cheap, and the real cost sits where no one can find it. You can not bid the next job right because you do not know what the last one cost.

Here is a simple way to keep supply house parts straight.

• **Match each supply house bill to the job: ** the bill shows the pick up slip or the job name.
• - **Split the parts out by type: ** pipe, fittings and fixtures are separate costs, not one lump.
• - **Tag each line with the job number: ** so the total for the job is real at month end.
• - **Reconcile the supply house statement to the bank: ** what you paid should match what cleared.
• - **Add up the parts cost per job at month end: ** that total feeds your profit per job.

When supply house parts sit by job, your profit per job is real. When they sit in one pile, you are guessing.

How to track truck stock

Truck stock is the parts that live on the van. Fittings, small valves, pipe lengths and rough materials sit in bins so a tech can grab them on the job. The van is a rolling parts room.

The clean way is to treat the truck as a small stock room. When you buy parts to fill the van, they go to a truck stock account, not straight to a job. When a tech pulls a part off the van for a job, that part moves from truck stock to the job. At month end, the truck stock account shows what is still on the van.

The messy way is to book every van fill up straight to a job, or to one parts account with no job tag. Now the van looks free, the jobs look cheap, and no one knows what the bins hold. Parts walk off the truck and the books do not show it.

Here is what to keep straight.

• **Fill the van into a truck stock account: ** not straight to a job.
• - **Move a part to the job when a tech pulls it: ** the part leaves the van and lands on the job.
• - **Count the van on a set day: ** a quick bin count keeps the books and the bins in line.
• - **Book the gap to a parts loss account: ** if the count is short, the missing parts get their own line.
• - **Refill from the supply house into truck stock: ** then move to jobs as they are used.

A van is not a free parts room. When the stock on the truck ties to the books, your parts stop disappearing and your job costs stay true.

How special orders fit in your books

A special order is a part the supply house does not keep on the shelf. A big valve, a custom fixture or a one off fitting comes in for one job. The part is ordered, paid for, and used on that one job.

The clean way is to book the special order straight to the job it was bought for. The big valve goes to job one. The custom fixture goes to job one. When the job is done, the special order is part of the job cost, right next to the supply house parts and the truck stock.

The messy way is to book the special order to one parts account and forget the job. Now the job that needed the big valve looks cheap, and the part sits in a pile where no one can tie it back. The next bid is built on a job that did not really cost what the books say.

Here is how to keep it clean.

A special order is just a supply house part with a wait. When it lands on the right job, the job tells the truth.

How to keep parts and labor apart

Parts are the pipe, fittings, valves and fixtures you put in. Labor is the tech time you spend on the job. The two should stay apart in the books.

When you mix them, you can not tell if you made money on the parts or on the labor. Some jobs pay on parts. Some jobs pay on labor. When the two sit in one line, you can not price the next job right.

Here is the rule.

• **Parts go to a parts cost line on the job: ** supply house, truck stock and special order all land here.
• - **Labor goes to a labor cost line on the job: ** tech hours billed to the job.
• - **Truck use goes to overhead or to the job: ** fuel and van wear that serve every job stay in overhead.
• - **A part returned to the supply house comes off the job: ** so the cost stays true.

When parts and labor sit on their own lines, you can see if your parts markup works and if your labor rate pays. That is the whole point of job costing.

How the month end close works

At month end, every job needs its costs added up. The supply house parts, the truck stock pulls, the special orders and the tech labor 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 supply house bill to the bank payment. We match each tech pay run to the bank. We tie each line to the job. We count the truck stock and book the gap. 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 supply house statement to the bank: ** every bill cleared.
• - **Confirm each part ties to a job: ** no orphan parts sitting in one account.
• - **Count the truck stock and book the gap: ** the van and the books agree.
• - **Add up the job total: ** parts plus labor plus special orders.
• - **Compare the job total to the income: ** the gap is the profit per job.

A situation we clean up

The van that ate the profit

A plumbing company runs three vans. The owner fills each van from the supply house once a week and books the whole bill to one parts account. The techs pull fittings off the vans all month. No one counts the bins. At month end, the books show a big parts cost and five jobs with no clear profit. The owner can not tell if the jobs paid or if the parts walked off the trucks.

Here is how we handle it. We pull the supply house bills for the month. We set up a truck stock account for each van. We move the van fill ups into truck stock, not straight to a job. We look at the job sheets and move each part a tech pulled from truck stock to the job it was used on. We count the bins on each van and book the gap to a parts loss line. When we are done, the owner can see the cost per job and the true profit for the month. The profit per job is real for the first time. We set up a simple rule so the next van fill up lands in truck stock, and the next part a tech pulls lands on the right job.

How we do it

We do monthly bookkeeping and payroll. We work in QuickBooks Online and Xero, and we are QuickBooks Online Accountants, called QBOA. Each client gets one dedicated bookkeeper who learns your business.

We categorize and reconcile in the first week. We send you one list of questions on day 8. We close your books by day 10 and send a profit and loss statement, a balance sheet, and a cash summary. We use read only access, and we never ask for your bank password.

We serve small businesses in Rancho Cucamonga, Ontario, Fontana, San Bernardino, and across the Inland Empire and the country. There is no long contract. It is month to month, with 30 days notice to stop. You can read more about how we work on our bookkeeping service page.

Mistakes we fix

• Supply house bills booked to one parts account with no job tag
• Van fill ups booked straight to a job with no truck stock step
• Special orders booked to one parts account and lost from the job
• Parts and labor mixed on one line so the markup can not be seen
• No bin count, so the truck stock and the books never agree
• No reconciliation between the supply house statement and the bank

What we do

We do two things: monthly bookkeeping and payroll. For bookkeeping, we categorize and reconcile in the first week, send one list of questions on day 8, and close the books by day 10. You get a profit and loss report, a balance sheet, and a cash summary. We start with a free 20 minute call and reply with a fixed quote in one business day.

Common questions

Do I need a truck stock account? Yes. When you fill the van into a truck stock account, the van stops looking free. When a tech pulls a part, it moves to the job. At month end you can see what is still on the van and what walked off.

How do I book a special order? Book the special order part and the freight straight to the job it was bought for. A special order is just a supply house part with a wait, so it lands on the same job.

Do parts and labor go on the same line? No. Keep parts on a parts cost line and labor on a labor cost line. When they sit apart, you can see if your parts markup works and if your labor rate pays.

Do you do payroll for my techs? Yes. Payroll is one of our two services, along with monthly bookkeeping. We run the pay, take out the right amounts, and send the reports that go with it.