Bookkeeping – 15 Critical Questions to Ask

By Gerri Detweiler

You’re sitting at your desk on a Sunday evening, staring at a pile of receipts and trying to make sense of the numbers. Payments are due Tuesday, payroll hits Friday, and you’re honestly not sure if there’s enough cash to cover both. Sound familiar?

Most OPE dealers and landscaping professionals are good at what they do: selling and servicing equipment or creating beautiful outdoor spaces. But accounting? That’s definitely not why they got into this business. 

Yet here’s the truth: the businesses that thrive in the industry aren’t always the ones with the prettiest showrooms or best crews. They’re the ones whose owners have learned to extract real intelligence from their financial data and act on it. 

If you’re a pro at knowing how many hours it will take to install a retaining wall, but don’t know your margins on the job, you have work to do.

The problem isn’t that you’re bad at business — it’s that nobody ever taught you which questions to ask when you’re doing your books. You enter transactions, reconcile accounts and file reports, but you’re missing the strategic insights hidden in those numbers.

These 15 questions will help transform your bookkeeping from a boring chore into one of your best business tools. 

Foundation Questions: Getting the Basics Right

1. Is my business structure actually working for me financially?

Your business entity choice affects every dollar that flows through your company. If you’re still operating as a sole proprietorship because you think it’s simpler, you could be leaving money on the table and exposing yourself to unnecessary risk.

An LLC or corporation with S Corp tax election may save a profitable landscaping business thousands annually in self-employment taxes, for example, when compared to one that operates as a sole proprietorship. Owners of businesses taxed as S Corps may be able to pay themselves a reasonable salary, which is subject to payroll taxes, and the rest as distributions, which are not. Ask an accountant to walk you through this option to make sure you comply with IRS rules. 

2. Am I using the right accounting method for where my business is today?

Cash-basis accounting works when you’re starting out with simple transactions. But if you’re an OPE dealer managing inventory and manufacturer relationships, or a landscaper with multiple ongoing projects, accrual accounting may provide a more accurate picture.

The danger of cash-basis? You might show zero revenue in May for a large installation that won’t be paid until July, making that profitable month appear like a financial disaster. Again, consult an accounting professional to find out what’s right for your business. 

Daily Discipline Questions

3. What does my cash position look like right now?

Here the key is to focus not on just your bank balance, but on whether your business has the money it needs to pay for immediate expenses. Check your cash flow summary daily, review accounts receivable aging, and monitor upcoming payables.

A daily cash pulse check allows you to spot problems before they become crises. Maybe that large customer payment is 10 days late with a payment, or you have an equipment loan payment due next week.

4. Are all my transactions captured and categorized correctly?

Accounting software can import bank feeds automatically, but garbage in equals garbage out. Each transaction needs to go into the correct category in order to be useful and accurate. 

For example: for a landscaper, this might mean separating “Materials:Fertilizer” from “Materials:Plants.” For equipment dealers, it means tracking “Parts” revenue separately from “Service” revenue. 

These details aren’t bookkeeping busy work — they’re the foundation for understanding what actually makes you money. Key to this process is setting up your chart of accounts correctly from the beginning. Get help if you don’t know how to do that. 

Weekly Management Questions

5. How quickly am I converting work into cash?

Get deposits or payments on the spot whenever possible. If not, send invoices immediately after job completion. Every day you delay invoicing is a day you’re providing an interest-free loan to your customer.

Track your average collection time. If customers typically pay in 30 days, but you’re invoicing two weeks after job completion, you could wait more than 44 days for your money.

6. What’s the real story behind this week’s numbers?

Don’t just record numbers, analyze them. If equipment sales are down but service revenue is up, what does that tell you about your market? If labor costs are higher than expected, is it overtime, inefficiency, or rate increases? 

Monthly Strategic Questions

7. What do my financial statements say about my business?

Your profit & loss, balance sheet, and cash flow statements work together. If your P&L shows profit but your cash flow from operations is negative, you have a collection problem. If sales are strong but your balance sheet shows growing debt, you may be growing too fast without the adequate capital.

If you don’t feel comfortable with these statements, ask an accounting professional or business mentor for help. If you decide to apply for small business loans or financing, a lender may request financial statements. Be ready and feel confident to get financing when you need it. 

8. Where is my money really coming from?

For OPE dealers, review your P&L. Parts typically generate 34% gross margins, service work about 56%, but new equipment only 12%. If 80% of your revenue comes from low-margin equipment sales, you’re working harder than competitors with balanced revenue streams.

For landscapers, analyze profitability by service type. Maintenance contracts might have lower margins but provide predictable cash flow, while installation projects offer higher margins but require more working capital.

Industry-Specific Deep Dives

9. What’s my true labor efficiency? (landscapers)

Track actual labor hours against estimates for every job. If you estimated 40 hours but used 48, that’s an immediate signal to investigate. Was it poor estimating, job site inefficiency, or unexpected complications?

Share this data with crew leaders. Transform them from supervisors into business-aware field managers who understand that time equals money.

10. What’s my effective labor rate?

To calculate effective labor rate (ELR), divide total labor sales by total billed hours. If your door rate is $120 but your ELR is $95, you’re losing $25 per hour to technician downtime, unbilled diagnostics, or perhaps unauthorized discounting.

This gap represents pure profit leakage. Fixing workflow inefficiencies and training service advisors can boost profitability faster than any other single action.

11. Are my inventory numbers accurate?

For dealers, inventory is typically your largest asset. Monthly physical counts compared to book records reveal shrinkage, theft, or system errors. More importantly, analyze turnover rates and identify slow-moving stock that’s tying up cash.

Use your inventory data strategically. Which parts sell consistently? Which equipment sits too long? This information drives better purchasing decisions and identifies opportunities to improve cash flow.

Equipment and Asset Questions

12. What’s the true cost of ownership for my equipment?

The purchase price of equipment is just the beginning. Monitor the full lifecycle of equipment cost including fuel, maintenance, repairs and depreciation. 

A landscaper might discover that Brand A mowers cost 15% more initially but have 30% lower repair costs and 50% less downtime than Brand B. That’s insight you can use for future purchases.

13. Am I maximizing equipment ROI?

Before major equipment purchases, calculate comprehensive ROI including increased revenue potential, productivity gains, fuel savings, and available rebates or incentives.

Don’t just consider direct revenue. A new aerator doesn’t just enable aeration service, for example. It might also reduce project time, improve crew efficiency, and enhance your professional image with clients.

Seasonal Strategy Questions

14. Does my cash forecast prepare me for the off-season?

Seasonal businesses need 12-month cash flow forecasts, not just monthly budgets. Map out when income peaks and troughs, and identify fixed costs during lean periods.

Try to build cash reserves covering at least six months of fixed expenses. Strong cash reserves let you negotiate better vendor terms, buy equipment at off-season discounts, and invest in marketing.

15. What can my numbers teach me about next year?

Which services were most profitable? What were your actual labor costs per hour? How did fuel expenses impact margins? This historical data can help you refine estimates, adjust pricing, and identify opportunities for the coming season. 

Leverage Your Knowledge

The next time you sit down with your books, start with one or two questions that resonate most with your current challenges. As answering these questions becomes a habit, add more. Before long, you’ll find yourself making decisions based on real data instead of gut feelings — and your bottom line will reflect the difference.

Gerri Detweiler serves as Education Consultant for Nav, a financial health platform that helps small businesses owners build and manage their business and personal credit, track cash flow patterns, and understand their financing options before they apply.