Budget categories

[Arborsharp]

I have a small tree co and am working to empower my accountant to categorize my expenses and income on my software (Waveapps).

-Truck expenses (including fuel and insurance- good idea to include both/either?)
-Maintenance and fuel categories for EQP (chipper, lift, skid) and small engine eqp (4 categories total)
-Rental fees
-Chip/log dump fees
-Sub-contract (I use temp agency employees as groundsmen)
-Commercial Liability ins
-Licensing and education
-Marketing (flyers, signs, other efforts)
-website and social media expenses
-Sales tax
-Payment processing
-Overhead- Accounting, business associations
-Office supplies
-Phone
-Property mortgage and maint

Are there any categories I'm missing? Or is there a way to simplify any that will streamline the process for my acctant?

Thanks for any thoughts- I don't mind accounting work, am going to do my best to keep tabs on the numbers, but this task is getting away from me and I need to be focusing on sales and tree work

 

[ValleyForge]

hookers and blow…just kidding…lol

taxes…and the big guys cut….

 

[ATH]

What do you want to know?

Just for taxes, at least combine the "marketing" and "website/social media" as they'd both be deducted under advertising expenaes.

Keep each vehicle separate. Include all expenses: fuel, repairs, insurance, etc ... On higher cost vehicles that you don't put a lot of miles on, it probably works out better to write off actual expenses rather than mileage.

Actually...ask your accountant how things should be broken down for taxes.

Now ..if you want to know exactly where you are spending money, then youay want far more categories. For example within rental fees, we might have rental for planting and another rental for a loader to use at the shop. I don't track those separately...but others would to have a stronger grasp on expenses.

So beyond tax stuff, it's really personal preference...but if you go to get a loan for a big piece of equipment, having more details may help with that too.

 

[Arborsharp]

thanks for the thoughts! I tend to be more detailed but practically so many categories are hard to you actually track so trying to discern what is realistic and necessary- fuel prices have spiked and affect how I price jobs further away, of course everything is going up in price in response to this. so maybe not that necessary to know fuel cost alone...

you both mentioned taxes, do you always base your estimated taxes off last year's final tax bill?

 

[ATH]

thanks for the thoughts! I tend to be more detailed but practically so many categories are hard to you actually track so trying to discern what is realistic and necessary- fuel prices have spiked and affect how I price jobs further away, of course everything is going up in price in response to this. so maybe not that necessary to know fuel cost alone...

you both mentioned taxes, do you always base your estimated taxes off last year's final tax bill?

Yes...it is called "safe harbor" as i recall. Here is from IRS:
If you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.

I despise doing taxes. That is not an anti-tax thing...it is the excessive junk involved with it. Anyhow, I really don't want to try to chase taxes throughout the year, so if I pay 100% of the previous year's tax I'll avoid a penalty even if I owe quite a bit more. Or, I'll get a refund if we had more expenses to depreciate.

 

[mikewhite85]

I've been using wave for over 10 years. Great program! The only sub par thing is the payroll. We use paychex for that. Your categories sound good. We, too, separate each piece of equipment so we know what we're spending. Best thing to do would be to talk to your accountant/tax person. To make it even easier, you could make all your categories exactly as it's itemized on a schedule C. It will be less specific however.