RenVU Professional Services Blog

Bookkeeping Cleanup for Residential Plumbing Company

Client Overview

  • Industry: Residential & Light Commercial Plumbing

  • Size: 6 technicians + owner/operator

  • Annual Revenue: ~$1.2M

  • Service Area: Multi-county local market

The Challenge

The company had experienced rapid growth over 24 months but lacked structured financial oversight. Key issues included:

  • 11 months of unreconciled bank and credit card accounts

  • Inconsistent job costing

  • Misclassified expenses (materials vs. COGS vs. overhead)

  • Outstanding A/R aging over 90 days

  • No reliable monthly P&L

  • Sales tax liability uncertainty

As a result, the owner could not confidently assess profitability by job type or determine true cash position.

Objectives

  • Clean up 12 months of bookkeeping records

  • Reconcile all balance sheet accounts

  • Correct chart of accounts for plumbing-specific tracking

  • Implement job cost visibility

  • Deliver tax-ready financials

  • Establish a repeatable monthly close process

The Approach

1. Diagnostic Review (Week 1)

  • Assessed accounting software file integrity

  • Identified duplicate entries and uncategorized transactions

  • Reviewed prior tax filings for consistency

2. Account Reconciliation (Weeks 1–3)

  • Reconciled all bank and credit card accounts

  • Corrected beginning balances

  • Cleared duplicate and uncoded transactions

  • Verified loan balances against lender statements

3. Expense Reclassification

  • Segregated materials, subcontractors, permits, and equipment

  • Reorganized overhead categories (fuel, insurance, advertising, etc.)

  • Established plumbing-specific cost of goods sold (COGS) structure

3. Expense Reclassification

  • Segregated materials, subcontractors, permits, and equipment

  • Reorganized overhead categories (fuel, insurance, advertising, etc.)

  • Established plumbing-specific cost of goods sold (COGS) structure

4. Accounts Receivable (A/R) & Accounts Payable (A/P) Cleanup

  • Cleaned the customer's aging report

  • Identified $48,000 in overdue receivables

  • Implemented invoice follow-up workflow

  • Cleared old vendor balances

5. Financial Reporting & Owner Review

  • Delivered corrected P&L and Balance Sheet

  • Created cash flow snapshot

  • Built job-type profitability summary

  • Conducted a financial review session with the owner

The Results

Metric

Bank Reconcilations

A/R Over 90 days

Gross Margin Visibility

Monthly Close Process

Tax Filing Confidence

Before Cleanup

11 months behind

$48,000

None

Not established

Uncertain

After Cleanup

Current & balanced

Reduced by 65% in 60 days

Clear by job type

10-day close cycle

Fully tax-ready books

Financial Insight Gained:

The owner discovered that replacing water heaters was significantly more profitable than handling small repair calls, leading to a shift in marketing strategy.

Client Testimonial

I thought we were profitable, but I didn’t actually know. After the cleanup, I could finally see where the money was going. We recovered thousands in unpaid invoices and now review numbers monthly. It changed how we run the business.

Key Success Factors

  • Industry-specific chart of accounts structure

  • Thorough balance sheet reconciliation

  • Clear separation of COGS vs. overhead

  • A/R recovery process implementation

  • Owner education and financial review

Ongoing Support

Following cleanup, the client transitioned into monthly bookkeeping and financial reporting services, including:

  • Monthly reconciliations

  • Job costing review

  • KPI tracking (gross margin, average ticket, labor ratio)

  • Quarterly financial strategy meetings

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