Service work and install work are two businesses
A service call is quick, mostly labor and parts, and is priced by the hour or the flat rate. An install is a bigger ticket with equipment, permits, a crew for days and sometimes a deposit up front. Roofing adds materials, dumpsters and weather delays. If both land in one revenue account, you cannot tell whether the trucks on service calls or the install crews are earning your profit.
We split revenue and direct costs by service, install and replacement work, tag each job with its labor, equipment and materials, and give you margin by job type. That is how you decide where to add a technician and which bids to raise.
Service agreements and memberships
Maintenance agreements bring steady revenue and repeat customers, but they are easy to book wrong. A membership paid up front covers a full year of visits, so recording it all in the month sold overstates that month and understates the rest. We set up the agreement revenue so it is recognized as the visits and coverage are delivered, track renewals, and show what the membership base is worth.
Equipment, trucks and the fleet
- Vehicle purchases. The type and weight of the vehicle and how you document business use affect the deduction. See our heavy vehicle checklist (PDF)
- Tools and equipment. Section 179 and bonus depreciation can pull deductions into the year you buy, but only for property placed in service by December 31
- Financing. Loans, leases and vehicle financing are recorded so payments split between principal and interest correctly
We look at the timing in the fall with a projection, as part of tax planning, rather than in the last week of December.
Seasonality and cash flow
HVAC rushes in summer and winter, roofing follows the weather, and plumbing is steadier but has its own swings. Revenue and payroll do not rise and fall together, so a profitable year can still include a month where you cannot cover payroll. We build a cash forecast around your own slow and busy months, set a reserve target before the slow stretch and help you decide when to use a line of credit and when to wait.
Technicians, pay and classification
Hourly, commission, flat rate and spiff pay all need to run through payroll correctly, and workers who are classified as subs when they are really employees create tax exposure. We review how your crews are paid and keep payroll, 1099s and the books lined up. Sales tax on parts and installation also varies by state, so we check the rules where you operate.
What clients say
“Sargis is great to work with. This was my first time hiring a CPA instead of doing it myself, and I'm glad I did, thanks Sargis.”
“Sargis is a tax strategist who has supported my business’ growth and helps me spend more of my own time running the other aspects of my business. His team is responsive, professional, and thorough.”
“Sargis and his team have been a lifesaver for our business. We are incredibly grateful not only for the quality of work they deliver, but the customer service that they offer.”
Questions we get asked
How do you split service and install profit?
We separate revenue and direct costs by job type, so you see margin on service calls, installs and replacements on their own, along with the labor and materials behind each.
How should maintenance memberships be recorded?
Memberships paid up front are generally recognized over the coverage period rather than all at once. We set up the entries and track renewals so each month reflects the work delivered.
Can I deduct a new truck or equipment this year?
Often, through Section 179 or bonus depreciation, if it is placed in service by December 31 and used in the business. Vehicle type and business use records matter, and we run a projection first.
How do you help with seasonal cash flow?
We forecast cash across your busy and slow months, set a reserve target ahead of the slow season and plan how payroll, equipment payments and taxes fit in.
Do you work with HVAC and plumbing companies in other states?
Yes. We are virtual and work with home service companies in all 50 states, and we check state rules on payroll, licensing and sales tax for where you work.