When you’re operating a commercial building, it’s important to keep track of how much money you spend and how much profit you earn. This is called financial accounting. It’s a way to measure your company’s performance over time and understand where your money goes.
When you own or manage a property, the HVAC system can be an expensive part of managing it. You probably have at least one room that stays at a consistent temperature throughout the year, which makes it ideal for installing an HVAC system in it. That means operating a commercial building requires some special accounting skills to keep track of everything from maintenance costs to purchases and repairs.
Let’s take a look at what you need to know about accounting for your HVAC system as a property owner or manager.
What Does It Mean To Be An HVAC Accountant?
An HVAC accountant is someone who keeps track of how much money they spend on their commercial building’s HVAC system. They do this to ensure that the business is always operating properly and saving money.
In order to be an HVAC accountant, you need a background in accounting and experience with residential systems. It helps to understand the financial aspects of the commercial building and its HVAC system.
You also need to know how to keep track of maintenance costs, purchases and repairs so you can optimize your business’s performance and avoid overspending on things like changing out components or repairing leaks.
If you have a commercial property that uses a central cooling unit, it’s important for you to know what items are included in operating costs and what days they’re charged to your company as well as when your company pays for them.
You’ll also want to calculate different rates for different hours of operation for central cooling units so you can understand how much profit or loss has been incurred by the time each day starts and ends.
How Do You Keep Track Of HVAC System Repairs And Maintenance?
Your HVAC system is a vital part of your property, so it can’t be ignored. You’ll need to take care of maintenance and repairs on a regular basis, so you’ll need to know how much it costs for parts and labor.
If you’re not sure how much these things cost or even how much does something cost, you should consider using a service like Bizcosts. Bizcosts tracks the prices for most major brands and makes it easy to see what prices are trending.
Their website also gives you insights into pricing trends based on the type of product you’re looking at. This means if you want to make sure your HVAC system is taken care of properly, Bizcosts can help make that happen.
If your property has more than one building with HVAC systems, then this will get a little more complicated as there’s more things to track. However, if all four buildings have an HVAC system that needs repair or replacement, then you can use the Bizcosts software as well as its spreadsheet program to keep up with it all in one place.
Equipment Purchases
When you purchase equipment for a commercial building, there are a few things to keep in mind. First, you need to make sure that the equipment is actually needed. This means if you’re not sure why you need something, it’s best to just hold off on purchasing it until you understand your needs better.
Once you decide what equipment needs to be purchased and how much money should be spent on it, create and maintain an inventory. You’ll want this list in case of damage or theft so that replacements can be ordered quickly.
You also have to make sure that the equipment has been installed properly. If the installation was completed improperly, it can lead to problems down the road with your HVAC system.
It’s important for property owners and managers to know how much time is required for proper installations since those aren’t included in the price of the HVAC system. Last but not least, make sure that when you buy new equipment, it is compatible with other systems already on site. Otherwise, replacing one system will cost more than replacing them all at once would have cost.
Taxes And Insurance
One of the first things to keep in mind is that you need to take a look at your insurance policy. Your policy should cover the HVAC system and includes specific information about what is covered, who pays for what, and how much your insurance will cost.
Your next step is to set up an account with your bank. The bank will provide you with an account number, which you’ll use as the official tax ID for your business. This account number can be used when filing taxes.
To keep track of everything you spend on repairs and maintenance, create a spreadsheet that contains new accounts for each repair or service you’ve purchased from commercial vendors.
You’ll want to write down the vendor’s name, the date of the purchase, how much it cost and any other information such as receipts or invoices from them. There are also some accounting software packages that are available to help you get organized and make sure all of your bills are paid on time so there aren’t any late fees due later on.
Pro Tip: Set Up Automatic Payments For Bills
Some bills, like the electric bill, come out regularly. You can set up your property to automatically pay these bills so that you don’t have to worry about forgetting when they come out. When it comes to HVAC maintenance and repairs, you need to be very careful.
It’s easy to forget a necessary repair or replace a part that is broken and cause major problems with your system. If you automate your HVAC spending, it will help you avoid this issue and save money over time.
Profit/loss From Selling Equipment Or Services
If you have a commercial building that you rent out, you can use your HVAC system to generate revenue. When using your HVAC system for profit, it’s important to know how much profit/loss you’ll make from selling equipment or services.
This information is useful for budgeting for the next year. When calculating profit/loss from selling equipment or services, you need to subtract the initial investment of your HVAC system from the cost of making it work. You also need to know if any costs were related to operating the HVAC system so they can be subtracted as well.
Let’s take a look at an example: Inputs: -Initial investment in the HVAC system: $3,000 -Costs related to running the HVAC system: $1,500 -Costs related to maintenance and repairs: $500 per month -Income generated by renting out a room with an HVAC unit installed in it: $2,000 per month -Selling price per unit: $600 Outputs: -Predictable costs for an entire year of renting out a room with an HVAC unit installed in it: $3,000 -$6,000 total income from renting out rooms with an HVAC unit installed in them over a year -$2,400 profit.
Summing Up
What you need for HVAC accounting? The first thing to remember is that many commercial buildings will require an individual account for each property. If you have multiple properties, this means that you’ll need a separate account for each one. Equipment accounts help to identify which items need to be purchased and when they will be replaced.
You’ll also have payroll and fixed assets accounts, which are helpful in calculating your net profit margin per property or other financial metrics. In addition to the overall financial accounting of your company, there are several other things that need to be accounted for: maintenance costs, purchase costs, and repairs.
For example, if your HVAC system requires repair work or servicing, you’ll need to make a note of it on your fixed assets account. This will help you track how much time and money is necessary for upkeep.
Finally, keep track of individual asset amounts using subaccounts like equipment accounts and payroll accounts so that you can monitor these expenses more accurately. This will help you understand where all of your company’s money is going and what’s left over for expense reimbursement after an upgrade or service call.
