What needs to be on landscapers’ financial reports: GROW 2019

A session at GROW! 2019 explained which financial data needs to be tracked and what you can safely cut from your reports
Streamline your accounting process by focusing on these financial metrics. (Photo: Prakasit, Dreamstime)

It’s not enough to track data. In fact, it’s easy to be overwhelmed by the amount of data you have at your fingertips.

In a session at the GROW! 2019 conference in Denver on Wednesday, Vince Torchia and Jim Cali shared which financial data landscape companies have a handle on in order to grow their companies.

[Related: Planning for purpose—How to build and grow a landscape business]

“What’s the point of looking at your finances if they’re wrong?” Torchia, vice president of The Grow Group, said.

There are plenty of software tools for landscapers, but companies can do a lot with a simple Excel sheet. What matters is the data, Cali, an executive coach for The Grow Group, said.

“If you’re a high-level CFO or an owner and you think anyone cares as much as you about finance, you’re dead wrong,” Torchia said.

Owners need to know where they can find this information and how to pull it themselves, Torchia said. “If you’re thinking about cash flow at two in the morning because you’re worried about payroll, you don’t want to have to wait until 8:30 for that person to come in and see your email,” he said.

Cali and Torchia broke down which data owners should be looking at and how frequently.

Daily

Daily reports should include the business’s cash position, shooting for an average of twice the amount needed to make payroll. That includes employees and any subcontractors. Torchia pointed out that “cash” and “cash available” are often different numbers, and cash available is the number that matters.

Directly related to cash is accounts receivable, which the speakers said should never be higher than 15% of sales.

“It’s your money. It’s your team’s money, and this is how you’re going to make payroll,” Cali said.

He recommended examining accounts receivable at least twice a week. “We lose our focus on receivables so fast,” he said.

Putting one person in charge of accounts receivable can help companies keep focus, and can help preserve good relationships with customers who aren’t being hounded by their sales contact for bill payment.

Cali recommended billing customers on the 25th of the month for payments that are due on the first “so that you’re five days ahead of the game and getting that cash flow on the first.”

Getting recurring customers on credit card payments can also help with cash flow. “Why not make it like a gym membership,” he said. “Dependable cash flow is priceless.”

Weekly

Current accounts payable and payroll are important metrics for weekly reports, but Torchia urged owners to include payroll taxes in that report.

Payroll taxes can add 25% to payroll, Torchia said.

A comparison of sales to date to what’s budgeted is another useful weekly metric to understand the health of the business.

Finally, make time to measure the hourly efficiency of the jobs that have been completed in the last week, Torchia said.

Monthly

Profit and loss statements are your monthly dashboard, Torchia said. While owners and CFOs are most likely to care about finances, this is the information that should be shared with the rest of the company. Action items for department heads and their teams are built around data from the PNL statement.

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