Tree Service Bookkeeping: Equipment, Fuel and Disposal Costs

What tree service books need to track

A tree job is not one flat cost. It is the truck that got the crew there, the fuel the truck and the chipper burned, the saws and the ropes the crew used, the time the crew spent up the tree and on the ground, and the fee you paid at the dump or the green waste yard. Each one needs its own line so the profit per job is real.

When all of those costs sit in one pile, you can not tell if a job paid. The fuel might have been the biggest cost on the job, but it sits in a general fuel line where you never see it tied to the job it burned for. The dump fee might come out of every job, but it never lands on the job that produced the branches. When the costs do not follow the job, the profit per job is a guess.

A clean job carries its own costs. The equipment wear sits on the job. The fuel sits on the job. The disposal fee sits on the job. The labor sits on the job. When you run the profit and loss by job, every cost shows up in the right place.

Here is what a clean job looks like.

When each line ties to the job, your profit per job is real. When they sit in one pile, you are guessing.

How equipment costs show up in your books

Equipment is the biggest hidden cost in a tree service company. Chainsaws need chains and bars. Chippers need knives. Trucks need tires and oil. Ropes and rigging gear wear out. Each one is a cost on the job that used it.

The clean way is to track equipment costs by job. When you buy a chain for a saw, the cost goes to the job that broke the old one or wore it out. When you buy chipper knives, the cost goes to the jobs that ran the chipper that month. When a truck needs tires, the cost spreads across the jobs that truck ran.

The messy way is to book every equipment buy to one flat supplies line and leave it there. Now your supply cost looks the same every month, even though some months you ran twice the jobs. You can not tell if one saw is eating your margin or if the chipper is costing more than it earns.

Here is how to keep equipment costs clean.

• **Book small wear items to the job that used them: ** chains, bars and rope.
• - **Spread big buys across the jobs that used the equipment: ** tires and chipper knives.
• - **Track which saw or which truck ran which job: ** so the wear ties to the work.
• - **Watch for one piece of equipment that costs more than the rest: ** it may need replacing.
• - **Compare equipment cost to job income each month: ** see if the gear is earning its keep.

When the equipment cost follows the job, you can see which gear pays for itself and which one costs more than it earns. You can read more about how we keep costs tied to the job on our bookkeeping page.

How fuel costs show up in your books

Fuel is the cost that moves the most in a tree service company. The truck burns gas to get to the job. The chipper burns gas to run all day. The saws burn gas and mix oil. Some days the job is close and the fuel is low. Some days the job is far and the truck and the chipper burn through a full tank.

The clean way is to track fuel by job. When the crew fills up on the way to a job, the fuel goes to that job. When the truck and the chipper run all day on one job, the fuel for that day goes to that job. At month end, the fuel sits on the right job, and you can see which jobs were far away and which ones were close.

The messy way is to book all fuel to one flat fuel line and leave it there. Now you can not tell if a far job paid after the fuel or if the fuel ate the margin. A job that looked profitable might have cost a tank of gas each way, and no one can see it.

Here is how to keep fuel clean.

• **Track fuel by job: ** not to one flat fuel line.
• - **Log the fill on the day the job ran: ** not from memory at month end.
• - **Tag the truck and the chipper fuel to the job: ** they both burn gas for the same work.
• - **Watch for far jobs that burn more fuel: ** a far job needs a higher price.
• - **Compare fuel cost to job income: ** see if the drive was worth it.

When the fuel follows the job, you can see which jobs were close and cheap to run and which ones were far and cost a tank each way.

How disposal costs show up in your books

Disposal is the cost most tree service books forget. Every job produces brush, logs and wood. You take it to the dump or the green waste yard and you pay by the load or by the ton. The fee is a cost on the job that made the load.

The clean way is to book the dump fee to the job that produced the load. When the crew drops a load at the green waste yard, the fee goes to the job the load came from. At month end, the disposal cost sits on the right job, and you can see which jobs made a lot of brush and which ones were small.

The messy way is to book every dump fee to one flat disposal line and leave it there. Now the cost is gone from the job. A job that produced three loads of brush looks just as profitable as a job that produced half a load, even though one cost three times as much to throw away.

Here is how to keep disposal costs clean.

• **Book the dump fee to the job that made the load: ** not to a flat disposal line.
• - **Track the loads per job: ** so you know how much brush each job makes.
• - **Watch for jobs that make a lot of brush: ** they need a higher price.
• - **Compare the disposal cost to the job income: ** see if the dump fee ate the margin.
• - **Watch for dump fee changes: ** a higher tip fee changes your margin.

When the disposal cost follows the job, you can price the next job right. When it sits in a pile, the big brush jobs look the same as the small ones.

How to tie all three to the job

Equipment, fuel and disposal are three costs that most tree service books put in the wrong place. All three sit in flat lines where no one can tie them to the job they served.

The clean way is to tag every job with a class or a project name in QuickBooks Online. When the equipment buy comes in, it goes to that class. When the fuel gets logged, it goes to that class. When the dump fee gets paid, it goes to that class. At month end, the class pulls it all together, and the profit per job shows every cost.

Here is how to tie it all together.

• **Set up a class or project for each job: ** so every cost has a place to land.
• - **Book the equipment wear to the class: ** not to a flat supplies line.
• - **Book the fuel to the class: ** not to a flat fuel line.
• - **Book the disposal fee to the class: ** not to a flat disposal line.
• - **Run the profit and loss by class at month end: ** so the real profit per job shows.

When all three costs sit on the same class, the profit per job is real. When they sit in three piles, the profit per job is a guess.

How the month end close works

At month end, every job needs its costs added up. The labor, the equipment, the fuel and the disposal pull together into one job total. The income sits next to it. The gap is the real profit for the job.

We start with the bank. We match each payment to the invoice it paid. We pull the fuel charges and tie each one to the job that burned it. We pull the dump receipts and tie each one to the job that made the load. We tie the equipment buys to the jobs that used the gear. We tie the labor to the job. Then we add up the month by job. We send you the profit and loss report, and the job totals sit inside it.

Here is a simple month end check.

• **Match each payment to the bank: ** every deposit cleared.
• - **Tie each fuel charge to the job: ** not to a flat fuel line.
• - **Tie each dump fee to the job: ** not to a flat disposal line.
• - **Tie equipment wear to the job: ** not to a flat supplies line.
• - **Run the profit and loss by job: ** so the real profit per job shows.

When the close runs every month, the jobs stay clear. When it skips a month, the costs pile up and the next month is harder to close.

A situation we clean up

The far job that lost money

A tree service company runs two trucks and a chipper. Every fuel buy goes to one flat fuel line. Every dump fee goes to one flat disposal line. The equipment buys go to a flat supplies line. The labor goes on the job. At month end, every job looks profitable. But one job took the crew three hours away, burned a full tank of gas, made four loads of brush, and broke a chain. The job looked like it paid, but the real costs were hiding in three flat lines.

Here is how we handle it. We go back through the fuel charges and tie each fill to the job that burned it. We pull the dump receipts and tie each fee to the job that made the load. We tie the chain buy to the job that broke it. We add a class to every job so the costs pull together. When we are done, the owner can run the profit and loss by job and see the real profit. The far job barely broke even after the fuel and the dump fees. The owner can see which jobs were close and cheap to run and which ones were far and cost more than they brought in. We set up a rule so the next fuel charge carries the job tag from the start.

Mistakes we fix

• Every fuel charge booked to one flat fuel line with no job tag
• Every dump fee booked to one flat disposal line
• Equipment buys in a flat supplies line with no job tag
• Labor on the job but the fuel, the disposal and the gear gone
• No class or project tag on any job
• No profit and loss by job run at month end
• A far job that looked good but barely broke even after fuel and dump fees
• No way to tell which jobs make a lot of brush and cost more to throw away
• A dump fee change that no one noticed until the margin slipped

Common questions

How do I track fuel by job? Log the fill on the day the job ran and book it to that job, not to a flat fuel line. When the fuel follows the job, you can see which jobs were far and which ones were close.

How do I track disposal costs by job? Book the dump fee to the job that made the load. Track the loads per job so you know how much brush each one makes. When the disposal cost follows the job, you can price the big brush jobs higher.

How do I track equipment wear by job? Book small wear items to the job that used them. Spread big buys across the jobs that ran the equipment. When the gear cost follows the job, you can see which saw or which truck is earning its keep.

Do you handle bookkeeping for tree service companies? Yes. We tie the equipment, the fuel and the disposal costs to the right job, so your profit per job is real and your month closes on time.