What Exactly Does a Bookkeeper Do? A Guide for Skilled Trades

When you’re running a business in the skilled trades, whether as a contractor, electrician, plumber, or another trade professional, your focus is on the job at hand. Managing finances might not be your area of expertise—but that’s where a bookkeeper comes in. If you’ve ever wondered what a bookkeeper actually does and how they can support your trade business, this guide will break it all down.

The Role of a Bookkeeper in a Skilled Trades Business

A bookkeeper is responsible for managing the financial records of your business, ensuring that everything from income to expenses is tracked accurately. They help you stay on top of your cash flow, manage invoices, and ensure compliance with tax regulations. In the skilled trades, where job costs, materials, and labor expenses fluctuate, having a bookkeeper is key to maintaining financial stability.

Key Responsibilities of a Bookkeeper

1. Recording and Organizing Transactions

Every dollar that comes in or goes out of your business needs to be recorded. A bookkeeper categorizes all financial transactions so that you can see exactly where your money is being spent and earned. For skilled trades businesses, this means tracking expenses like materials, subcontractor payments, and tool purchases.

2. Managing Job Costing and Profitability

Understanding whether each project is profitable is crucial for contractors and tradespeople. A bookkeeper helps break down the costs associated with each job, including materials, labor, and overhead expenses, so you can price jobs effectively and increase profitability.

3. Handling Invoices and Accounts Receivable

Bookkeepers ensure that invoices are sent out on time and that you’re getting paid for completed work. They track outstanding invoices, follow up with clients, and help maintain healthy cash flow—so you’re not left chasing down payments.

4. Payroll and Subcontractor Payments

Whether you have employees or subcontractors, payroll can get complicated. A bookkeeper helps manage payroll, ensuring that everyone gets paid accurately and on time, while also handling tax withholdings and compliance requirements.

5. Tax Compliance and Reporting

Skilled trades businesses often deal with complex tax requirements, including sales tax on materials, 1099 reporting for subcontractors, and quarterly tax filings. A bookkeeper helps you stay compliant by keeping accurate records and ensuring deadlines aren’t missed.

6. Financial Reporting and Insights

Without clear financial reports, it’s hard to make informed business decisions. A bookkeeper provides reports such as profit and loss statements, balance sheets, and cash flow statements to help you understand the health of your business and plan for growth.

Why Skilled Trades Businesses Need a Bookkeeper

While some business owners attempt to handle their own bookkeeping, it often leads to errors, missed tax deductions, and financial stress. Here’s why hiring a bookkeeper is a game-changer for tradespeople:

• Saves Time – Instead of spending hours sorting receipts and tracking expenses, you can focus on your trade.

• Reduces Costly Mistakes – Errors in bookkeeping can lead to IRS penalties, missed invoices, and cash flow issues.

• Provides Peace of Mind – Knowing your finances are in order allows you to concentrate on growing your business without financial worries.

• Prepares You for Growth – A well-maintained bookkeeping system makes it easier to secure financing, hire employees, and expand your services.

Should You Hire a Bookkeeper or Do It Yourself?

If you’re running a small skilled trades business and bookkeeping feels overwhelming, outsourcing to a professional is a smart investment. A skilled trades-focused bookkeeper understands the financial challenges of your industry and can tailor their services to your needs. Take this quiz for further insights.

Are you ready to take bookkeeping off your plate? Let’s chat about how professional bookkeeping can support your skilled trades business.