When you’re running an equipment rental business, you have to make a lot of ongoing financial decisions. These decisions have widespread effects across every area of your business – purchasing, maintenance, staffing, marketing, and more.
Without diligent accounting and bookkeeping, it’s easy for profit-impacting issues to fall through the cracks.
These accounting best practices will help you keep your finances organized, streamlined and audit-ready. Leveraging the right software also automates processes to free up your time for higher-value strategic tasks.
Accounting Tips & Strategies for Rental Companies
Managing the accounting and finances of an equipment rental business can quickly become complex and time-consuming. But with the right systems and discipline around your financial processes, you can eliminate chaos and gain insights into the fiscal health of your company.
Here are six smart tips to improve accounting, cash flow, reporting, and more.
1. Use accounting and bookkeeping software to streamline and automate your financial processes.
Solutions like QuickBooks Online are a must for any small to midsize business, including your equipment rental company. Quickbooks’s industry-leading financial software integrates seamlessly with your bank accounts to automatically import and categorize all of your transactions – no more manual data entry.
QuickBooks can also integrate with dedicated rental business management platforms like Quipli, creating a streamlined and largely automated process to keep things running smoothly. This saves a lot of time on accounting and unifies data across platforms.
Software provides tailored features for equipment rentals including invoicing, payment processing, tax calculations, revenue tracking by asset, reporting, and more. This removes grunt work so you can focus on big-picture financial strategy rather than paperwork.
2. Number your invoices sequentially for ease of reference.
Accounting software can automatically assign invoice numbers in order as they are generated. But even if done manually, this simple step can save lots of hassle trying to identify vague invoices by date or customer name later on. Make the number format logical and easy to follow.
3. Create and maintain a comprehensive Vendor Master File that keeps all your accounts payable information in one place.
This can include information like contacts, addresses, tax IDs, payment terms, and purchase histories.
Quipli’s software features a built-in vendor management module, which serves as a centralized database for all supplier profiles and interactions. The master vendor file acts as your AP hub to optimize vendor relationships and transactions. It enables easy reporting on payments, balances due, purchase analyses, and more.
Customers can also be tracked in a centralized Master File for full accounts receivable visibility. Consolidated customer profiles help you readily stay on top of billing, payments, account status, purchase history, and other CRM data.
This optimized customer insight assists collection efforts and nurtures long-term relationships through an understanding of their business.
4. Be sure to send out customer invoices within 48 hours after a rental concludes, while it’s still fresh in the customer’s mind.
Many software options can automatically generate and email invoices upon rental return for instant delivery. Quick invoicing while service details are top of mind helps get your bills paid faster. Customers perceive fast, professional billing as an indicator of your overall service quality.
If an upcoming due invoice remains unpaid, send reminders via email and/or phone at appropriate intervals, e.g. one week before the due, the day before the due, and the day of the due date.
Polite but firm reminders demonstrate you are monitoring accounts diligently while also giving customers an opportunity to remedy before further action is required.
Take a look at our equipment rental receipt and invoice templates if you need help.
5. Review past sales patterns, future projects, and current P&L reports to prepare a quarterly budget projecting income and expenses for the upcoming quarter.
Factor in potential fluctuations from seasonality, inventory changes, staffing needs, etc. that could impact budget vs. actuals. Adjust projections month to month accordingly. Regularly comparing your budget to real-world results highlights issues to address and helps guide smart decision-making.
Curious about equipment trends? Check out our report on construction equipment trends.
6. Be sure to understand sales tax laws, which vary widely by state and often even by city/county within a state.
For example, Los Angeles County has a 9.5% sales tax while San Francisco’s rate is 8.5%. States like California also have complex agricultural exemptions. Non-compliance can lead to audits and stiff penalties, so tax codes must be followed diligently in all regions you operate.
As a small business, you need to pay quarterly estimated income taxes to avoid underpayment fines. Work closely with your accountant and bank to ensure accurate, timely quarterly tax payments.
The IRS and state agencies impose harsh penalties on late filers. Payroll taxes must also be handled punctually each period to avoid fines. Leverage capable payroll software to fully automate tax withholding and payments.
Learn more in our equipment rental tax guide.
Quipli’s Quickbooks Online integration can help you keep your financials running smoothly
With strict accounting discipline in place, rental owners can cut through the chaos, get financial insights, stay compliant and free up time to focus on big priorities. Partnering with capable solutions like Quipli optimizes accounting workflows to run a tighter, more profitable rental operation.
Partner with a specialized platform like Quipli for rental-optimized accounting automation. Quipli integrates with QuickBooks Online to handle invoicing, collections, taxes, and reporting so you can focus on your business.
Reach out today to learn more and request your free demo!