Tailoring QuickBooks for Pool Service Businesses with Sharon Burch

In this episode of Between Two Stops Niki Acosta and Sharon Burch discuss the intricacies of managing a pool service business, focusing on the importance of setting up QuickBooks correctly for financial reporting and decision-making. Sharon shares her expertise in bridging the gap between pool service owners and accountants, emphasizing the need for accurate tracking of income and expenses. They also explore pricing strategies, the significance of preparing for business transitions, and the essential reports that every pool business should maintain for effective management.

Watch the replay of a recent webinar with Sharon Burch here. 

Get online training or book a consultation with Sharon Burch here.

Transcript

Niki Acosta (00:30)
Welcome, welcome, welcome. I'm Niki Acosta. This is Between Two Stops and we have an awesome guest with us. Today, someone I just had the pleasure of presenting with in a recent webinar, Sharon Birch, everybody. yes, Sharon is, I'll let her tell her story, but we did a really cool webinar about QuickBooks and setting up your business to get real-time reporting.

Sharon Burch (00:43)
Yay! Fun to be here.

Niki Acosta (00:57)
And so this is just kind of a follow up to that and to kind of give people some ideas about what they can do to be ready for 2025. So Sharon, I'll let you introduce yourself.

Sharon Burch (01:07)
Yeah, so yeah, my name is Sharon and I have a lot of background in different types of businesses including the pool business and I brought all of my I guess expertise or knowledge of system setup and integration. I love technology. I love streamlining things. So when we found Skimmer and then connected that to QuickBooks, it was all about how can we set up a QuickBooks. And one of the big things that I had issues with in all businesses was

Okay, my QuickBooks needs to be set up in a way that I see the reports that we need to see and quickly discovered that the pull business is its unique beast. it, so then I got into the weeds of how do you customize this to see the reports that we need to know how we're operating, how are we doing, so forth. And then that took off. I started sharing how to do that. And now I'm doing that with a lot of people. So that's why I'm here, which is a lot of fun.

Niki Acosta (02:03)
Yes, and I've heard rave reviews, you know, part of what you do is you actually go in to help people set up their QuickBooks. Either you can pour them or you have online training, correct?

Sharon Burch (02:13)
Yeah, I'm doing mostly one-on-one right now, but I'm about to launch a course because I can't keep up with the demand. But the key part is getting it set up correctly. I guess I want to lead with, at the time that you're listening to this podcast, it is not too late. So I run into business owners who feel they've given up. They've tried to set up their QuickBooks or they outsourced it to an accountant or a CPA.

and that person's really good at their job, but they don't understand the pull industry. And there's this disconnect that we find between the business owner who doesn't know how to ask for what they need from the accountant because they don't understand enough to know how that works. And the accountant doesn't know enough about the pull business to know how to ask the right questions for what they need. So I feel like I'm the bridge.

bridging that gap between the two. So I tend to go in and set it up in a way that's going to work for the pull business owner and also make sense to the accountant. So at the end of the year, your tax preparer isn't spending hours and hours trying to figure out your books, which often happens. So.

Niki Acosta (03:29)
Yeah, and I know a lot of, you know some of the more modern, you know, pull service software platforms and field service software platforms, most of them integrate with QuickBooks already. I've heard mixed opinions about QuickBooks. Some people love it. Some people hate it. But it is for all intents and purposes, it's still the industry standard, right? In every industry, it's like it's the market leader.

Sharon Burch (03:39)
Right.

It is the market leader.

And one of the reasons is it's, it's, attempt to design it in a way that their hope is that the business owner will know how to use it, which can be very frustrating for accountants and CPAs, because they're used to getting into more detail or using a desktop version and having, you know, get into the, the journal entries and all of that. But

And if you want to streamline your business, QuickBooks Online is the way to go because it connects with almost everything. And every pull service software that I've been working with, with clients, clients do different ones. And Skimmer does an amazing job of making it easy. So once it's set up correctly, when you receive that income and the payments for that income, if it's set up correctly on the QuickBooks side, you barely have to touch your QuickBooks and your income is booked for you. So really, you only need to learn how to document your expenses and your loans and any, you know, that type of thing. And once you get it, it's a pretty easy thing to keep up with. It's just that upfront setup, making sure that it's in there in a way that you're getting the reports you need. I almost forgot what the question was, but anyway.

Yes, it is definitely the industry standard, but it can frustrate some people.

Niki Acosta (05:18)
You nailed it. Totally nailed it. We're having fun here today, folks. Why not? So Sharon, not only are you an expert in QuickBooks and, you know, pool service software at this point, but you also own a pool business too, right?

Sharon Burch (05:32)
Yeah, absolutely. I mean, that's how we really got in the weeds of it. I set up QuickBooks for other businesses, mostly ours, and then took that knowledge into the pool business that we owned. And I can tell you from walking into the business when we first bought it, it was pretty much paper and calculator and just using QuickBooks to send invoices. Like that was it. So they had no one central place without a lot of work to see the full financial picture of their business, which is essential to know how are you doing? Are you profitable or are you just winging it? And if you're not profitable or that margin, you know, the net income doesn't look that great, why? And the only way you know that is that you're booking every transaction if the money goes in or the money comes out of your business bank account, you have to document every transaction in a way that you can see where those expenses are happening so that you know, wait, maybe I spent too much on that chemical or on that part, or I spent the normal part, but I'm still selling it for the same rate that I've been selling it for 10 years. In the meantime, that particular part or chemicals have increased their prices, but I didn't increase what I'm selling to the customer and therefore I'm reducing my profit margin. The only way you know that is if you're tracking every transaction.

Niki Acosta (07:09)
Yeah, we are definitely finding that to be a concern. Just price increases across the board. you know, especially in markets that are very dense, you know, markets in Florida, there's a lot competition, there's a lot of smaller pools, there's a lot of screened in pools. And so, you we see, we talked to a lot of people who are out there saying, hey, you know, I'm happy just to take care of my 100 pools or 70 pools or 50 pools and, you know, charge a certain rate. But it's like, okay, great. That's awesome… but what about your retirement plan? What about your future? What if you could get paid for what you're worth? What if you could increase prices because your costs are increasing? And I don't know if it's fear. That seems to be a very common one. I was at a IPSSA meeting just last night and there was a guy saying, you know, I've got my 70 pools and a lot of these customers I've had forever and I just, I don't know. I just, feel guilty raising prices because they love me. I go in their backyard, I do a good job.

Sharon Burch (07:41)
Right.

Yeah.

Yeah.

Niki Acosta (08:08)
And it's like, yeah, we hear that a lot. at some point, too, I think you are doing yourself a disservice and the industry a disservice if you are not keeping up with your pricing to make sure that you can have a good living and that you can buffer against some of the price increases that are largely out of your control.

Sharon Burch (08:26)
Yeah, I can speak to that into two avenues or approaches, I guess, to think about. I work with a lot of clients now with different scenarios. And so one of those is if you are ready to leave the pool business or you are forced to, due to a health reason either to yourself or something in your family, or you're just ready to get out of the business. Well, hopefully what you want to do is you want to be able to sell your business or at least the pull routes, which is a nice perk. What businesses do you get to just sell, you know, like this piece, the routes, that's not normal in all businesses. So it's a really nice perk.

Niki Acosta (09:12)
There's so much address,

right?

Sharon Burch (09:14)
Yeah,

I'm going to sell you some addresses. But in order to do that and get what they're worth, you need to be running a profitable business of those pool routes in the first place. So you're not going to get the income that you should receive if your financials show a lower price or that your net income and what you priced it at.

because the person wanting to buy your business is going to look at that and go, okay, well, I can get those customers, but what the price that I mean, we'll go to the extreme, but let's say that you want to double the price when you get that now they have the fear they're going to lose the customers. So it's actually really wise to keep your prices increasing, not only for your own income, but even on the day that you want to sell it, you're going to have a stronger business and attract more buyers than you would if you didn't do that.

Niki Acosta (09:54)
Right.

Sharon Burch (10:09)
So that's really important.

Niki Acosta (10:11)
Yeah, most definitely. If you can pull up your Quickbooks and print out a report and show you how you've done historically, too.. I mean, that is a huge reassurance for the person who would ultimately be taking over those clients.

Sharon Burch (10:24)
Yeah, absolutely. That's a great segue into what I often see is that, is that folks are tracking income really, really well, but they're not tracking the expenses, which I alluded to earlier. And the other piece that I don't know if I've ran into any client that's already doing this. I don't think I have, but at the point that you're getting ready to sell your business is

they'll ask some questions and one, they want to know what is the net profit, profit and loss on your pool cleaning part, pool service part versus your pool repairs part, right? That will be a question. Another question will be what are your chemical cells and what is the profit on the chemical cells, right? So, and then the final question they'll ask is what are your owner add backs? And I have not,

started with any client that's been tracking that. They just lump it in with their business. So what that means when it's lumped in with all of your expenses and you don't have a way to separate that out is you're never seeing a true picture of how is your operation working, you know, is it functioning. But if you set up your QuickBooks in such a way that you have, you're using the class function in QuickBooks, which pro tip here, you have to have QuickBooks online plus version in order to do it.

Now you see your profit and loss like a normal profit and loss with every transaction going in and out. But if you are using the class function and you have one of those that says owner, now those one-time big expenses or startup expenses, things that are not part of your normal operation, you can put them in the class of owner. So it's still in your books. But now you can pull a report that takes the owner ad backs or those one-time big expenses off to the side.

If you have facility and equipment expenses like an office, a parking lot, land, property, or you have construction side to your business, you can pull that off to the side and now you only see it will house my pool route sales and operation working when I'm just looking at daily operations without the owner add backs. And that's going to be a big question. So once you realize, I can set up my QuickBooks like that now, then do it.

because now it's ready not only for the day that the dreaded part happens or the day that you're jumping for joy because you get to retire and you're going to sell your business, however you look at it, but also–  it's the way that you can honestly look at your business throughout the year. Even if you just started or you're in the middle of like you're thriving and you're growing, it's a way that you can see how my operation is really doing? And then also, okay,

If I take out my owner back owner add back, so I take out the facility and the equipment part of it, how's the operation running? And then where's, here's these expenses happening on this side. You know, most business owners, if you're wise, you're paying yourself a salary or however you're doing that. You're going to put that in the owner add back side. Is it a legitimate expense? Yes, it is. But if you're looking at your operation, you don't want to look at it with your own salary in there because that's something you're doing right in compensation. So.

There's a lot of things you can do when it's set up that way now. And the beginning of the year, January, February, March, it's not too late. You can still do this. It starts to become very overwhelming at the end of the year to do it for the year prior. But this is a great time in the spring to do that. And you can get your QuickBooks set up so you can see the reports you need to make informed business decisions based on reality of what's really happening.

Niki Acosta (14:14)
So speaking of reports, part of what you showed us during the webinar and part of what you set up are a specific few reports. What are the reports that you like to build and why?

Sharon Burch (14:20)
Mm-hmm.

Okay, great question. Well, the big three that any business, regardless of pool business or any business, is the balance sheet to know what is the true value of my assets, what I owe people, what they owe me, combined with my cash, my fixed assets. So you want that. And then you need your profit and loss, which that's what everybody's familiar with. And okay, I received this much money and I spent this much money. Where's my bottom line?

my upside down or right side up and Then your cash flows so that you can forecast how much cash is kind of flowing in and you can think Yeah, okay. I'm doing okay. I can spend this on whatever the ones that become specific to a pool business are. What are my pool route or pool cleaning part of my business profit and loss? Am I paying too much for chemicals and not charging enough for?

the work being done, you know, am I upside down or is my profit margin a lot less because the cost of chemicals have went up and didn't make the adjustments. So being able to see customized reports of profit and loss of pool service, profit and loss of pool repairs is part of your business. If you have pool construction or remodeling in your business, being able to see that as a profit and loss stream. And then knowing what that looks like

without the other things that I already mentioned. So those are big because you really need to know how am I doing? And those are the reports that I create by customizing using classes and chart of accounts. The other one I would say, and I'll wrap up this up, is that oftentimes, even if you don't use classes, take the time to put buckets of income in your income account.

So instead of just saying all my income is going to go into sales or into service or whatever, put them into buckets of like labor for pool cleaning income, labor if you're not doing a monthly flat rate. If you're doing a monthly flat rate, then you're going to do monthly pool service income and then labor for pool repairs income. And then you would have another sales of chemicals income, sales of parts.

used for repair income and what am I forgetting? I feel like I forget. Oh, and then the other side is the expense. Now when you set up QuickBooks and you set up your products and your services by default, it's going to put in the bottom purchases. So here's my income. And then when I go to purchase it, it just by default puts it in purchases. But here's the gold. So you can get those reports you need is instead have that expense line be

cost of chemicals sold, if it's chemicals, or cost of parts for repair or maintenance sold. Now you have a report that shows you, here's the total income I got for either of those categories. Here's the cost of those parts or cost of those chemicals. And you can see it all in one sheet or one glance.

Niki Acosta (17:45)
So if someone's asking like, what is my margin for pull service and I don't have an answer, this is a really good way to be able to get dialed in, to have visibility in your business, to be able to forecast what coming months might look like or a coming year might look like. If you know where you're at, you can also set goals of where you wanna be, you know, and do some backwards math and say, okay, I wanna retire in 10 years. What do I need to do to retire in 10 years and work backwards? And say, okay, well, I've got this many pools now if I want to retire, then I need to be at this many pools to be able to sell my business for 10x or whatever the number might be, right?

Sharon Burch (18:18)
Mm-hmm.

Mm-hmm.

Yeah, that's ideal. And the other side benefit of that is when you have your QuickBooks set up in the ways I've been describing, then you can easily export this data into a spreadsheet and then build those dashboards that you see in some of my videos because it's already sorted. you're literally just...

exporting and putting into a spreadsheet with some formulas to get those dashboards to go a comparison. Okay, how was July this year compared to July of last year? How was August? And you can see that trend in that dashboard, but it only happens if  the data that you're pulling from is already kind of sorted for you.

Niki Acosta (19:06)
Yeah, look, if your chemical costs are trending upwards, but your price is the same, then that's eating into your margin, right? So yeah, I love talking to you, Sharon, because I think you have a passion and a lot of knowledge and expertise around a topic that I would say that most pool company owners kind of struggle with in general.

Sharon Burch (19:13)
Right, exactly.

Yeah.

Niki Acosta (19:30)
And so to those folks who are listening going, yeah, I don't know what an add back is. I don't know what that means. But I know I need to get my books together. And I know I want to know what my marks are. And I know I want to assess the health of my business on a regular basis. That's why people like you exist. So I'm so glad that you are participating in our Pull Deck community and that you've taken the time to do these webinars and that you have been an invaluable resource to so many of our pros.

Sharon Burch (19:39)
Yeah.

Niki Acosta (19:58)
who are setting up billing and accepting payments through Skimmer and wanting to sync that with QuickBooks and get all of those juicy, yummy reports that are so crucial to helping you plan your future and build a great business. So if people want to get a hold of you, how do they do that?

Sharon Burch (19:58)
Thank you.

The easiest thing is poolserviceclickbooks.com.

Niki Acosta (20:23)
and that will you have the video courses that will probably be launching somewhat soon?

Sharon Burch (20:28)
Yeah,everything will be there. You can contact me there. You can see my approach, the things that you've been listening to me talk about. have some videos on what that looks like and I kind of talk through them. They're all really short videos, but that is, that's the hub where you can reach out and get started. And I just encourage you… the only reason I'm in this business is because it happened organically and so many people need it.

And it's one of those things that is really difficult to do, it feels overwhelming. And as everyone listening to this, you're going to pool business. It's a chaotic business that everybody it's like going crazy. And so it's really hard to stop and slow down and think about this. It's one of those things you just keep pushing ahead and then you deal with it when you talk to your tax preparer at the end. And, know, it's just.

It's one of those things that's important, but not urgent. And the pool business is always in the urgent mode, unless you happen to be living in the North in the winter, and then you have time to really think about it. So anyway, it's, it's really, I guess I'm passionate about it because I know how critically important it is to businesses. And I've been that business person who at one time didn't understand those numbers. And I paid for it.

Niki Acosta (21:52)
Right.

Sharon Burch (21:53)
and they will never do that again. So I want to see others have this, have the opportunity and if I can figure it out, I know that they can, too.

Niki Acosta (22:02)
or you can help them figure it out by just doing it for them. That's the other option. Well, Sharon, thank you again. Website again is...

Sharon Burch (22:04)
Yeah. One of those things.

poolservicequickbooks.com

Niki Acosta (22:17)
poolservicequickbooks.com. And we will leave a link in the podcast description for the webinar that Sharon did where she talks a great detail about some of those reports and tips for tax time and all that good stuff. So check that link out if you want to learn more. But Sharon, again, thank you. It's really, really great to be graced by your wisdom and your presence.

Sharon Burch (22:45)
Thank you.

Niki Acosta (22:47)
Everyone have a good day and everyone say bye.

Sharon Burch (22:51)
Bye. Thanks, Nikki.

Niki Acosta (22:52)
Let me try that again, because that ending was pretty terrible.

Sharon, thanks again for coming and gracing us with your presence. We certainly appreciate it. And we hope that you can continue to be a great resource for full pros out there somewhere. That was dumb, too. How about we just say, all right, we'll just say like, all right, thank you, Sharon, so much. Everybody say bye.

Sharon Burch (23:14)
Thank you.

Sounds good.