Get In Touch

Chart of Accounts for a Cleaning Business: How I Set It Up

So when I open a cleaning company’s QuickBooks file for the first time, the most common thing I see is one income account. Everything the business earned, every house, every building, every deep clean, all pumped into a single bucket called Income or maybe Sales. And the owner will tell me business is good, and the bank agrees, but nobody can answer the next question, which is where the money actually comes from and what it costs to earn it. That’s a chart of accounts problem, and the good news is it’s very fixable.

What a chart of accounts actually is

It’s kind of a fancy term for a simple thing: the list of categories every transaction gets sorted into. Income accounts for money coming in, expense accounts for money going out, plus accounts for what you own and what you owe. When a report looks useful, it’s because the chart underneath it was set up to answer real questions. When a report looks like mush, same reason, opposite direction.

The principle: short list, heavy tags

My engineering background probably shows here, but the design rule I follow is to keep the account list short and let tags carry the detail. A lot of owners try to answer the which-job question by creating an account per building, and the list turns into a junk drawer nobody maintains. In QuickBooks, the customer and project tags exist for exactly that, so the accounts describe the kind of money, and the tags describe whose money. Two dimensions, and literally every useful report is some combination of them.

The structure I use for cleaning companies

Income

  • Residential cleaning income. Route work, one-time houses, move-out cleans.
  • Commercial cleaning income. Contract accounts, offices, retail, medical.
  • Tips. Tips are income and they belong in the books. A small sub-account keeps them visible without cluttering anything.

Splitting residential from commercial at the income level is the single highest-value change for a company that runs both. The first month the profit and loss shows the two sides separately is usually kind of an eye-opener.

Direct costs, the money it takes to do the work

  • Cleaning supplies. Chemicals, paper goods, vacuum bags, the consumables that get used up on jobs.
  • Small equipment. Vacuums, mops, machines cheap enough to expense. Where the dollar line sits between expensing and treating something as an asset is a call your CPA makes, so I set the account up and follow their line.
  • Direct wages. What you pay employees for time on jobs, kept apart from office or admin pay.
  • Subcontractor labor. Payments to 1099 crews, in their own account, never mixed with wages. Come January the 1099 totals are just sitting there.
  • Vehicle and mileage. The vans, the fuel, the miles between jobs. Route businesses live in their vehicles and the books should show it.

Overhead, the cost of existing

Insurance, software subscriptions, the phone, marketing, uniforms, office bits. These stay generic on purpose, right, because the interesting analysis lives in income and direct costs, and overhead mostly just needs to be visible and reasonable.

Where the job-level answer comes from

Notice nothing above says which building or which route. That’s the tags’ job. Every invoice, every supply run, every labor dollar gets tagged to a customer or project, and then QuickBooks can show you profit for the Hendersons’ route or the dental office contract without the account list growing at all. It takes a little discipline in the first month and almost none after that, because the setup does the remembering. [WHEN LIVE: link /tracking-job-expenses-for-cleaning-crews/ on the phrase tagged to a customer or project]

Mistakes I keep seeing

  • An account for every building. The junk drawer problem. Tags exist so this doesn’t have to.
  • Personal and business in one bank account. The books can be untangled, but every month costs more effort than a separate account would.
  • Subcontractors paid out of the same account as wages. January becomes archaeology.
  • Copying a generic template. The default service-business chart isn’t wrong exactly, it just answers nobody’s questions. Yours should be shaped like your company.

Getting it set up

If you’re starting fresh or rebuilding, this is the core of what I do in a QuickBooks setup, and I teach you to run it as we go. [WHEN LIVE: link /quickbooks-setup-for-cleaning-companies/ on the phrase QuickBooks setup] You can grab a time on my calendar and we’ll look at what you’ve got. If you have any questions, feel free to reach out. Hope this clears it up.