Great question — and a critical one. Getting this right helps you understand your business, not only report to the IRS on it.
Let’s walk through the approach step-by-step in a clear, practical way — whether you’re setting up for the first time or cleaning up a messy chart of accounts.
✅ Step 1: Start With What You Actually Sell
Go to your website.
Seriously. This might sound obvious, but it’s often the clearest reflection of what your business is promising to the world.
Ask yourself:
- What’s on the homepage?
- What services or products are listed?
- What do you talk about in your calls with clients?
- What do people actually pay you for?
Make a list of the real offerings. This could be:
- Lawn mowing
- Snow plowing
- Fall clean-up
- Mulching
- Landscaping design
- Irrigation install/repair
✅ Step 2: Group Your Sales by Revenue Buckets
Here’s where people often go too deep and get lost in the weeds. You don’t need 20 different income accounts.
📌 Rule of thumb: Start with 5 to 8 core revenue streams.
Think of these like “buckets” of income — each representing a category of your business.
Example for a landscaping company:
- Residential Maintenance
- Commercial Maintenance
- Snow Removal
- Design & Build Projects
- Irrigation Services
- Seasonal Add-ons (mulching, fall clean-up, etc.)
Now, each of these can have multiple services or products that map to the same income account. That’s where your Product & Service List in QuickBooks comes in.
✅ Step 3: Set Up Your Product & Service List in QuickBooks
QuickBooks lets you create detailed items (services/products) — each one can be linked to an income account.
Think of it like this:
Service/Item Income Account
Weekly mowing Residential Maintenance
Commercial snow plowing Snow Removal
New lawn installation Design & Build Projects
Spring mulching Seasonal Add-ons
➡️ In QuickBooks:
Products and Services = the items you invoice
Income Accounts = the “buckets” they feed into on your P&L
✅ Step 4: Keep Your Reporting Clean & Useful
If you go too granular, your profit & loss (P&L) report turns into chaos.
You don’t need:
- Mowing front lawns vs. back lawns
- Plowing residential vs. commercial by zip code
- 20+ income accounts
You do need:
- Simple, smart categories
- Easy-to-read monthly/quarterly reports
- Clear patterns of what’s working
Why it matters:
- You can spot your best sellers and slow movers
- Make pricing decisions (raise or lower based on demand)
- Predict seasonality (e.g., snow removal spikes in Q1)
- Plan for diversification during slow months
Pro Tip: Did snow plowing underperform this year? You’ll see it in your P&L and income account. Was it a warm winter and slow during a period of time? Now you can plan to upsell clean-ups or tree trimming next year during that window.
✅ Step 5: Review Regularly & Adjust
This isn’t “set it and forget it.” Once a quarter (or at least once a year), sit down and ask:
- Are these still the right buckets?
- Did we launch something new?
- Is anything outdated?
- Can we consolidate?
Better data = better decisions.
🔁 Example: Before vs After QuickBooks Setup
- ❌ Before:
- 17 income accounts (too much detail)
- “Other Income” is getting out of hand (dollars are being miscoded)
- P&L is confusing — difficult to make decisions by looking at the numbers
✅After:
- clean income categories
- Product/Service list mapped properly
- P&L is readable — shows top sellers and seasonality
- You can run a report for “Design & Build Projects” and see exactly how they’re trending
🧠 Real Story: Client Turnaround
We worked with a landscaping company that had all its income going into one “Sales” account. That’s it.
No idea what was actually driving profits. No way to track service performance. Pricing was all over the place.
After we cleaned up their chart of accounts and mapped their services properly in QuickBooks:
- They saw that snow removal was profitable only if they hit a certain volume
- Realized mulching was their best upsell
- Increased lawn care package prices because they were underpriced by 15%
- Took on fewer design jobs that were low margin
They felt in control of their business again.
📈 Why Numbers Help You Grow
When your revenue is done the right way, you get:
- 💵 Clear financials you can actually use
- 📊 Reports that show trends (not nervous noise)
- 🧠 Smarter business decisions
- 📅 Seasonal planning power
- 💬 Confidence talking to your CPA, lender, or investor
If you want to learn about if hiring a bookkeeper is best for your business or not go HERE article to learn more.
🔚 Wrapping It Up
If you’re serious about growing your business — or want to sleep better at night knowing your numbers are right — this step matters.
You don’t need to be a bookkeeper or an accountant.
But you do need a system.
Set up your income accounts the smart way, link them to your product and service list, and watch how much easier decisions get.
👉Ready to Clean Up Your Chart of Accounts?
Want expert help QuickBooks setup?
Schedule a Free discovery call to see if we are a good fit.
We’ll help you:
- Organize your income categories
- Set up your product/service list
- Get reporting that drives smarter decisions
📅 Schedule Your Free Zoom Fit Meeting Now.
