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Keep the records that answer the questions an owner will ask — sales by product, a job log, unpaid invoices, supplier invoices — read decisions out of them, and keep them in a daily, weekly and monthly routine with a separate backup; retention periods come from tax and employment rules.
Paper packet. Every task here also exists on screen, where it is checked automatically; answers written on paper are not assessed by Nydus. When you are back at a device, enter your answers there.
You will read a sales log, work job profits out of a job log, choose the record a question needs, work out who still owes money, fill in an electrician's job log, and price a job from the log.
Every decision in this course — break-even, opportunity cost, constraints, risks, insurance limits — needed figures. Those figures come from records. Without them, a decision rests on memory and guesswork, and memory is reliably wrong in the same direction: owners remember the busy days, the big jobs and the customers who paid, and forget the rest.
| Term | What it means |
|---|---|
| Record | A lasting note of something that happened: a sale, an invoice, a job, a payment. |
| Job log | A record of each job's price, hours and materials, one line per job. |
| Accounts receivable | The list of invoices customers have not yet paid: who owes the business what. |
| Routine | The regular habit that keeps records current. |
| Backup | A copy of the records kept somewhere separate from the original. |
| Retention period | How long a record must be kept for tax or legal reasons. |
A useful record answers a question the owner will actually ask:
$$\text{job profit} = \text{price} - \text{materials} - \text{hours} \times \text{hourly cost}$$
Northside Repairs kept only its bank statements. The owner believed e-bike services were its best work. A month of job log showed a service priced at 220 dollars using 60 dollars of parts and 8 hours at 25 dollars an hour: a loss of 40. Wheel rebuilds, at 180 with 40 of parts and 3 hours, made 65. The record changed the price list: the e-bike service rose to 325, enough to match the rebuild's profit.
Another way: table
A month of Northside Repairs' job log.
| Job | Price | Parts | Hours | Profit |
|---|---|---|---|---|
| E-bike service | 220 | 60 | 8 | −40 |
| Wheel rebuild | 180 | 40 | 3 | 65 |
Another way: steps
Start from the questions. List what the owner needs to know to run the business — which products and jobs earn most, who owes money, what each supplier charges, how busy each day is — and what others will ask: the tax return, the insurer after a loss, a lender, a buyer one day.
Match each to a record. Each question points to the record that holds its figures. A question with no record behind it is answered by guesswork.
Capture as it happens. A record written at the time is accurate; one reconstructed at the end of the month is a guess with a date on it. A photo of a receipt, a line in the job log when the job is finished, an invoice sent the same day.
Read decisions out of it. Records are kept to be used. A month's job log compared line by line shows which jobs to reprice or drop.
Check the records against the bank. Every sale in the sales log should arrive in the bank; every payment out should have an invoice behind it. A gap is either a mistake in the records or money going astray, and both are worth finding while they are fresh.
Records kept 'when there is time' are records not kept. A simple routine:
Keep records findable: one folder per month, names that say what a file is, the same layout every time. Most small businesses now keep their records in accounting software or a spreadsheet, linked to the bank, which does much of the weekly check automatically. The software helps only if the daily capture happens; it cannot record a cash sale nobody entered.
The list of unpaid invoices deserves its own mention, because it is money the business has earned and not yet received. A small business with several trade customers can easily have thousands of dollars owed to it without the owner noticing, because the work was done and the invoice sent weeks ago. The list shows each customer, each invoice, its date and whether it has been paid; the weekly bank check marks off the payments that have arrived.
Invoices older than the agreed terms — thirty days is common — are chased that week. The older an unpaid invoice gets, the less likely it is to be paid at all, so the list is also an early warning of a customer in trouble.
Some records are needed for tax and legal reasons, and how long they must be kept depends on the rules where the business operates. In the United States, the IRS generally asks businesses to keep records that support their tax returns for at least three years after filing, longer in some situations, and employment tax records for at least four. States may have their own rules, and records about property and equipment are kept for as long as the business owns them. Owners check the current rules with the IRS guidance or an accountant rather than guessing, and many simply keep everything for seven years to be safe.
A job log is only as useful as its hours, and hours are the figure most often left out. Price and materials are on the invoice and the receipt; the time a job took is in nobody's paperwork unless someone writes it down. So the log needs a habit: the mechanic, cleaner or cook notes the start and finish of each job, or the job sheet has a line for hours that is filled in before the job is closed.
The hourly cost to use is what an hour of the worker's time costs the business: the wage, plus payroll taxes, plus any benefits, spread over the hours actually worked. For an owner working alone, it is what the owner's time is worth, which is at least what they could earn working for someone else. Using too low a figure makes slow jobs look profitable.
Materials should be counted at what they cost to replace, not at an old price, and should include the small things that are easy to forget: fuel for the trip, disposal fees, the consumables used on the job. A log that leaves these out overstates every job's profit by the same small amount, which adds up over a month.
With hours, the hourly cost and full materials, the log can show profit per job and profit per hour. The second is often the more useful, because the owner's scarcest resource is usually time. A job that makes 60 dollars in two hours earns more per hour than one that makes 90 in four.
Records answer questions only if they can be found. A good rule is that anyone in the business should be able to find last March's supplier invoices in under a minute. That means one place for each kind of record, the same folder structure every month, and file names that say what the file is and when: "March clay supplier invoice" beats "scan0047".
Paper and digital records both work, but mixing them without a rule does not. A common pattern is to photograph every paper receipt on the day it arrives, file the photo in the month's folder, and keep the paper in a single envelope per month in case an original is needed.
Backups follow the same idea: a copy kept somewhere separate from the original, so a single fire, theft or broken laptop cannot take both. Cloud storage, a separate drive kept at home, or both are common. A backup that has never been tested may not work; once a year, try restoring a file from it.
A landscaping business near Charlotte, North Carolina, had kept its records the way many small firms do: invoices in one folder, receipts in a shoebox, and the bank statement as the only summary. Revenue was rising every year, but the owner felt busier and no richer.
At an accountant's suggestion, the owner kept a job log for two months: one line per job, with the price, the crew hours and the materials. Crew time cost about 30 dollars an hour. Weekly lawn mowing, priced at 45 dollars and taking about an hour with 3 dollars of fuel, made 12 dollars a visit. Spring cleanups, priced at 250 dollars, took a crew of two about four hours each, 240 dollars of labor, plus 40 of dump fees: a loss of 30 on every one, and the business had done 35 that spring.
The owner raised the cleanup price to 360, which covered its costs and made about the same profit per crew hour as mowing. A handful of customers went elsewhere; most paid. The same log also showed three commercial customers more than sixty days behind on their invoices, together owing 4,200 dollars, which a week of phone calls recovered.
Anyone buying a small business asks for its records first: several years of accounts, sales by product and customer, and the unpaid invoices. A business with clean records sells faster and for more, because the buyer can see what they are paying for.
The bank statement is enough. It cannot show which product or job earns what.
Keep everything, however useless. Keep what answers questions or the rules require; the rest is clutter.
Records can be caught up later. A daily habit keeps them accurate.
One copy is safe. Keep a backup somewhere separate.
Software keeps the records. It keeps what is entered; the capture is still the owner's job.
A job that feels busy must be profitable. Busy jobs can lose money on every visit; only the log's price, hours and materials show which.
Add the weekdays.
$45 + 50 + 60 = 155$
Wednesday to Friday.
Add Saturday's baskets.
$155 + 120 = 275$
The week's baskets.
Find Saturday's share.
$120 \div 275 \approx 0.44$
Almost half the week.
Find Wednesday's share.
$45 \div 275 \approx 0.16$
The quietest day.
Move the helper's hours.
$\text{Wednesday} \to \text{Saturday}$
Where the line is.
Work the e-bike service.
$220 - 60 - 8 \times 25 = -40$
A loss on every one.
Work the wheel rebuild.
$180 - 40 - 3 \times 25 = 65$
A profit on every one.
Count the month's e-bike services.
$12 \times (-40) = -480$
Twelve done last month.
Count the month's rebuilds.
$10 \times 65 = 650$
Ten done.
Price the service to match.
$60 + 200 + 65 = 325$
Costs plus the rebuild's profit.
Check the new service's profit.
$325 - 60 - 200 = 65$
It now earns what a rebuild does.
List the month's invoices.
$180 + 120 + 240 + 150 = 690$
Four cafés.
Mark the payments from the bank.
$180 + 240 = 420$
Two have paid.
Find what is still owed.
$690 - 420 = 270$
Two cafés to chase.
Check the dates.
$\text{one invoice is } 45 \text{ days old}$
Past her 30-day terms.
Chase it this week.
$\text{a polite reminder with the invoice}$
Before it gets older.
Record the chase.
$\text{date and reply in the list}$
So the next step is clear.
Back up the list.
$\text{copy to a separate drive}$
At month end.
Work a deep clean's profit.
$240 - 30 - 6 \times 25 = 60$
Price, supplies, six hours.
Work a move-out clean's profit.
$200 - 40 - 7 \times 25 = -15$
A loss.
Price the move-out clean to match.
Monica's sales log shows $32$ baskets on Wednesday, $35$ on Thursday, $34$ on Friday and $68$ on Saturday. Complete the sentence.
She sold w baskets from Wednesday to Friday, and t in the week.
Complete the worked solution: A line in Northside Repairs' job log reads: tune-up, priced at $260$ dollars, $110$ dollars of parts, $2$ hours. A mechanic's hour costs $25$ dollars. Find the job's profit.
Multiply the hours by the hourly cost.
$2 \times 25 =$ l
The labor.
Subtract the parts from the price.
$260 - 110 =$ c
What is left for labor and profit.
Subtract the labor.
$(\text{price less parts}) - (\text{labor}) =$ g
The job's profit.
Set it beside other jobs.
$\text{one line of many in the log}$
The log compares jobs.
Act on the comparison.
$\text{reprice or drop the weakest job}$
The record makes the decision.
Northside Repairs' job log shows a wheel rebuild priced at $280$ dollars, using $100$ dollars of parts and $6$ hours, and an e-bike service priced at $350$, using $80$ of parts and $7$ hours. A mechanic's hour costs $25$ dollars. Fill in each job's profit, in dollars. Write a loss with a minus sign.
| Profit, dollars | |
|---|---|
| Wheel rebuild | |
| E-bike service |
An electrician does about $34$ jobs a month and suspects some kinds of job lose money, but cannot tell which. Which record would answer that?
Maya's invoice list shows four café orders this month: $160$, $130$, $170$ and $170$ dollars. Her bank statement shows the first and third have been paid. How much is still owed to her, in dollars?
Answer:
An electrician in Columbus, Ohio, starts a job log and an hour of her time costs 50 dollars. Outlet installs: priced at $310$ dollars, 60 dollars of materials, $5$ hours; she did $8$ last month. Panel upgrades: priced at $1100$ dollars, $420$ of materials, $11$ hours; she did $7$. Fill in the working sheet.
| Amount | |
|---|---|
| Profit on one outlet install | |
| Profit on one panel upgrade | |
| Month's profit from panels | |
| Month's hours on outlet installs |
Lesson test: one question per skill, one attempt each, no hints. Your answers are checked when you submit.
Northside Repairs' job log shows a wheel rebuild priced at $210$ dollars, with $30$ of parts and $2$ hours, and an e-bike service using $110$ of parts and $9$ hours. A mechanic's hour costs $25$ dollars. What price would make the e-bike service earn the same profit as a wheel rebuild, in dollars?
Answer:
You can set up records that make decisions possible. Tell someone why the bank statement is not enough. Next: protecting payments and data.
17. Your turn: Bright Home Cleaning's job log, step 3
$40 + 175 + 60 = 275$
Costs plus the deep clean's profit.