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Bookkeeping for HVAC Companies
HVAC has the most seasonal cash flow of any trade and the most prepaid revenue. Maintenance agreements sold in spring pay for visits in autumn. Equipment bought on distributor terms in June is paid for in August. Books that record cash as it lands will tell you July was wonderful and October was a disaster, and both are wrong.
Maintenance agreements are deferred revenue
A $240 annual agreement sold in March is not March income. It is a liability that becomes revenue as the two visits are performed. Booking it as income when sold inflates spring, starves autumn, and makes the agreement base look less valuable than it is. Your bookkeeper carries agreements as deferred revenue and releases them as visits happen, which also produces the one number an HVAC buyer or lender asks for first: the size of the recurring agreement base.
Equipment, distributor terms and rebates
Condensers and furnaces are bought on account from a distributor, installed, and paid for thirty to ninety days later. The equipment cost belongs to the install job when it is installed, and the payable belongs to the distributor until paid; those are two different dates and the books keep both.
Manufacturer and utility rebates arrive weeks after the job, sometimes to you and sometimes to the customer. Treated as miscellaneous income they distort the install margin; posted back to the job they were earned on, they make it accurate.
Install versus service versus agreements
Three lines of business with three margins: equipment installs, demand service, and agreement visits. Your bookkeeper reports them as separate departments so you can see that agreements run at a modest margin but feed the service and replacement pipeline, that installs carry the equipment cost and the financing fees, and that demand service is where the margin is. Pricing decisions follow from that picture, not from a single blended number.
Consumer financing
A $12,000 system sold on a 0% promotion pays you net of a dealer fee that can run into four figures. If the books record the net receipt as the sale, the install margin looks fine and the financing cost disappears. Your bookkeeper records gross revenue, the dealer fee as a cost of the sale and the net deposit, so you know what the promotion actually cost.
Seasonal payroll and overtime
Summer overtime, seasonal installers, and techs who are paid differently on install days and service days. Payroll is run with labour posted to the right department at the burdened rate, which is what makes the departmental margins honest.
Tell your bookkeeper how many agreements you carry and roughly what you install in a year. That is enough to quote a setup that shows all three margins.
HVAC Companies: common questions
How are maintenance agreements handled?
As deferred revenue when sold, released to income as each visit is performed. The agreement base is reported monthly.
Refrigerant and small parts?
Tracked as truck stock with a periodic count for most companies; posted to the job when a job consumes a meaningful quantity.
Can the books show margin after financing fees?
Yes. Gross sale, dealer fee and net receipt are recorded separately, so financed and unfinanced install margins can be compared.
Does your bookkeeper handle the distributor statements?
Yes: bills entered when equipment is received, statements reconciled monthly, and early-payment discounts flagged where they are worth taking.
What your bookkeeper handles
- Construction Bookkeeping Services
- Contractor Bookkeeping for Trades and Service Companies
- Construction Payroll Services
- Job Costing and WIP Reports for Contractors
- Construction Bookkeeping Cleanup and Catch-Up
Also written for General Contractors, Plumbers, Electrical Contractors, Landscapers, Roofers, Painters, Remodelers, Pool Builders, Handyman Businesses and Concrete & Excavation.
Request a quote for your HVAC company
Tell us about the company and the state of the books. Your bookkeeper replies within one business day with a plain answer: what it would take, and what it would cost. Requests answered within one business day · Calls Mon–Fri, 9am–5pm Eastern Or call (888) 720-4009 if you would rather talk it through first.