Adam Sand shows roofers how to structure their chart of accounts to stop profit from disappearing. A bloated miscellaneous category hides losses, so he breaks down account numbering, matching revenue to costs, and tracking returns. His team shares a free month-end checklist.
Most roofing companies don't realize that their chart of accounts is silently draining their profits, and they won't even know it. I'm Adam Sand, CEO of the roofing business partner. In this video, I'll break down how your chart of accounts should be structured. Why clarity here matters more than you think. Because without it, you're not running your business. You're guessing. And guessing is how profits disappear.
So we want to talk about your chart of accounts, because this is all about putting more money in the piggy bank. But your chart of accounts is like a piggy bank of smaller piggy banks. When you look at your chart of accounts and you look in your accounting software, you want to ask question, is it easy to read? Like, if I look at my list of accounts, accountants will just put numbers in there and it's because they're used to owners that don't look at the darn books. But it should provide you with some monthly clarity as to where your money went. In roofing, we're very fortunate in that we got very clear controls. You got subcontracted labor, material, marketing, cost of sales, boom. There's 75% of your money right there. And then you're really fighting over the remaining little bit. So then there should be some kind of consistent and logical indexing. This is like all your income accounts have a number like 1001010020 is a logical indexing, like five digit numbers. So you can start to go, okay, ones are income, fives are cost of goods sold. Like, you get to some kind of like logical indexing of them and you want to make sure all accounts are presented. So sometimes you get in a situation where you don't have an account, you have too many miscellaneous accounts. And you shouldn't have too much stuff in your miscellaneous because miscellaneous is essentially net profit. So if you have 1% of your expenses in the miscellaneous box, what that means is you have 1% wasted money. You have 1% net profit loss because you don't know what that money is. It's just money that has no intention. Everything should have an intention. Your chart of accounts is basically, this is the account that I invest into through expenses to make money. Then you want some kind of revenue and cost of goods alignment. This should be the easiest thing for roofers to do. The only thing is you want to be aligned with your accountant on certain things. Like cost of sales is sometimes people think of it as a cost of goods sold. And I've seen accountant people go back and forth then returns and discount clarity. This is something that you want to know about because when you do your returns and you get those month end discounts for paying on time, you want to be able to see those things. You want to be able to see like how much money are we making back in returns and how much money are we getting back in our discounts and as well as the discounts that you're doing for your customers. So there's a checklist right here. You can scan this QR code. So this is your month end close checklist. So you can make a copy of this. Anyone with the link is a viewer, so you can just make a copy. You will be able to edit this. But this is a month end closeout checklist. So this is the same closeout checklist that we use at rbp. Like this is the same checklist that my bookkeeper does every single month she has this and I get a new one every single month. Right where she marks off and she has some notes. So it's person responsible is usually her someone on our team. When it's reconciled through, she'll set herself due dates. This could be imported into ClickUp so she maintains it this way. This is all the stuff that you want to have your accountant go through every single month. And I paid $40,000 to get this because I hired a financial consulting firm to help me get this. And I'm giving this to you for free. Now, there are other services in that 40k. I'm not saying this is a $40,000 spreadsheet, but this was the first thing they gave us was they said, okay, you got to start doing this every month for us to be able to do our job and to consult you. You have to make sure your books are getting finished like this. So hopefully this is something that you guys can walk away with and use.
