The Business
The client is an electrical contractor with a crew of five and a fleet of three utility trucks. The work was steady and the business was growing, but it had never had a real accounting system. There was no general ledger. Spending ran through several credit cards, and those cards were used for both business and personal purchases.
Without an accounting system, the owner could not see what each job actually cost, what the trucks and equipment were costing to own, or how much the business really earned once personal spending was separated out.
Why Setup Is the Part That Matters
Opening a QuickBooks account takes minutes. Setting it up so the numbers are right takes real work. Software only records what it is told. If opening balances are wrong, personal charges are mixed in with business expenses, or a truck payment is recorded as a single expense, every report after that carries the error forward.
For this business, a proper setup meant three things: separating personal spending from business spending, recording the trucks and their financing correctly, and organizing costs so the owner could see what the jobs themselves cost.
What We Asked For
The setup was built from the business's own records. At the start of the engagement, bkept asked the owner for:
- Year-to-date bank statements for every business checking and savings account.
- Year-to-date credit card statements for every card used for the business, including the mixed-use cards.
- Loan statements for any business loans or lines of credit, showing balances, rates and payment history.
- Financing statements for the utility trucks and other equipment bought on terms.
bkept rebuilt the books from the start of the year, so that going forward the business would have a full year of history to compare against. Any business adopting QuickBooks should expect to gather the same set of statements.
The Owner's Role
Statements show what moved and when. They don't always show why. That made the owner's involvement essential, and it is the part of setup that surprises most owners.
The mixed-use credit cards were the clearest example. Personal and business charges are treated differently in the books and on the tax return, and only the owner could say which was which. The owner reviewed the card transactions with bkept and clarified each personal charge, so business expenses were accurate and personal spending was recorded as the owner's draw rather than a business cost.
Owners should expect questions like these during setup:
- Was this charge for the business or personal?
- Was this material bought for a specific job, or for general shop supply?
- When was each truck bought, what did it cost, and how was it financed?
- Is this deposit a customer payment, a loan or money you put in yourself?
Most of these questions are asked once. After setup, rules and routines handle them going forward.
The Setup
A chart of accounts built for the trade
The chart of accounts was the largest piece of the project. bkept started from a standard service business template, then worked through the operational details of electrical contracting with the owner and adjusted the accounts to match. The most important was separating job materials, which belong to the cost of specific jobs, from standard overhead such as the shop, insurance and office expenses. That split is what lets the owner see true job costs and gross margin.
Loan and financing schedules
Each truck payment is split into two parts. The interest portion is an expense on the profit and loss. The principal portion reduces the loan balance on the balance sheet. A schedule for each financing agreement tracks that split payment by payment, so expenses aren't overstated and the balances match what the lender says is owed.
Fixed assets and depreciation
The trucks and major equipment were recorded as assets, not as one large expense in the month they were bought. A depreciation schedule spreads their cost over their useful life, giving a truer picture of profit and lining up with what the tax preparer needs.
Liability balances and reconciliation
Loans, financing and credit card balances were set up with accurate opening balances. Bank and card accounts were connected through bank feeds with rules for recurring transactions, and every account was reconciled to its statement.
Beyond the Books
With the books in place, bkept looked at how the financial work got done day to day. Tasks were reorganized and handed to the right people on site, and internal controls were put in place so that spending is reviewed and approved before it is paid.
The business now runs on a regular schedule:
- Accounts payable review and payment processing on a set cadence, instead of paying bills as they surface.
- Cash flow reporting, so the owner can see what is coming in and going out.
- A monthly accounting close with a defined schedule.
- A monthly one-on-one meeting between the owner and bkept to review the numbers and plan ahead.
What Changed for the Owner
For the first time, the business has numbers the owner can use: job costs separate from overhead, an accurate picture of what the trucks cost and what is still owed on them, and business results that are not blurred by personal spending. With a full year of history building up, every month can now be compared with the ones before it, and the monthly meeting turns those numbers into decisions.
Takeaways for Businesses Adopting QuickBooks
- Gather statements first. Year-to-date bank, card, loan and financing statements are the foundation of the setup.
- Plan to be involved. Only the owner can say which charges are personal and what each purchase was for.
- Separate personal from business. They are treated differently in the books and on the tax return.
- Build the accounts around the work. Splitting job costs from overhead is what makes the reports useful.
- A truck payment is not one expense. Interest and principal belong in different places, and the truck itself is an asset that depreciates.
- Set a schedule. Regular payables, cash flow reporting, a monthly close and a monthly check-in keep the books right after setup.
The client is not named to protect their privacy. Details are drawn from the engagement.