Tree service bookkeeping: books that survive a storm week

Revenue lives in jobs, and a deposit is not a sale

Tree companies quote by the job, so the books have to be organized by the job too. Whether you run Arborgold, SingleOps, ArboStar or Jobber, the estimate-to-invoice trail in that software is the source of truth, and QuickBooks Online should mirror it rather than reinvent it from bank feeds. We connect the two so each invoice carries its job, crew and service type into the ledger.

Deposits on large removals and crane jobs sit as customer deposits, a liability, until the work is done and the invoice issued. Booking them as revenue on the day the e-transfer arrives inflates a slow March and understates the month the crew actually earned it. We also split income by service line — removals, pruning, stump grinding, plant health care, emergency and storm work, municipal contract work, and wood or chip sales — so the year-end statements show which parts of the business carry the trucks. A chart of accounts built for how you actually sell is the first thing we fix on a takeover.

Three customers, three kinds of receivable

Residential, insurance and municipal work get paid on completely different clocks, and one blended A/R aging hides that. We tag every invoice by customer class and age each class on its own.

Storm claims are the ones that go stale. The crew clears the tree in a day, the file sits with an adjuster for weeks, and by the time the cheque arrives nobody remembers which job it settles. Photo documentation attached to the invoice in the field software, plus a monthly review of every open insurance file, keeps that receivable real.

Chippers, bucket trucks and the capitalization line

Equipment is where tree service books most often go wrong, because the same supplier invoice can be a repair, a betterment or a new asset. A chain, a bar and a hydraulic hose are expenses. A rebuilt boom, a new cutter drum on the chipper or a chassis swap extends the life of the unit and belongs on the balance sheet.

We carry each unit as its own fixed-asset sub-account, with the loan or lease attached, so a trade-in or an insurance write-off hits the right undepreciated capital cost. Chippers and stump grinders generally fall in Class 8, trucks in Class 10 (heavy trucks built for hauling can land in Class 16 depending on rated weight), and chainsaws, saddles, ropes and hand tools under the small-tools limit go to Class 12. Crane rentals with an operator are not equipment at all; they are a direct cost of the job that needed them, and we post them that way.

Financing gets split every month — principal to the loan, interest to expense — because dealer statements rarely do it for you, and a year of blended payments booked as truck expense overstates costs and hides the debt you still owe.

Crew-day costs, fuel and the payroll numbers that hide

The unit that matters in this trade is the crew-day, so the ledger is built to price one. Wages and their burden — CPP, EI, Employer Health Tax, vacation pay and WSIB premiums, which are heavy in tree work — sit in payroll accounts mapped to crews. Fuel, disposal and subcontracted crane hours are coded to jobs through QuickBooks projects or classes. From there, the cost of putting a bucket crew on the road for a day is a report, not a guess.

• Fuel: clear diesel and gasoline for licensed trucks and coloured diesel for chippers and stump grinders are kept in separate accounts, because Ontario fuel tax treats them differently and an auditor will ask.
• Disposal: tipping fees for chips and logs, offset by chip drops and any firewood or log sales, which are income and need to be recorded even when paid in cash.
• Subcontractors: crane companies and freelance climbers accumulate toward year-end T4A slips, so we track them as vendors from the first invoice.
• WSIB: premiums are remitted on reported insurable earnings and reconciled annually, and the ledger needs to agree with what was filed.

Receipts come in from the truck, not the office. Dext on the crew leads' phones captures fuel, parts and dump receipts the day they happen, coded to the job, which is the difference between real job costing and a shoebox in the glovebox.

HST and the monthly close

Tree work is fully taxable at 13 percent in Ontario, including municipal contracts and insurer-paid claims. The timing point people miss is deposits: HST on a deposit becomes payable when the deposit is applied to the invoice, not when it is received, so the deposit liability and the HST payable have to move together. Input tax credits on trucks, chippers, fuel and repairs are substantial, which is one reason the quick method rarely fits this trade.

Each month we reconcile the bank, the field software's invoice register, the payment processor and the deposit liability, then send financials that show revenue per crew-day and margin by service line. If your growth plan includes a used bucket truck from a US auction or a crew heading south for storm work, our cross-border tax page for tree services covers the records those need. Our bookkeeping services page explains how the fixed-fee monthly close works.

Source: CRA — Classes of depreciable property.