A three-week accounting cleanup gave a $1.25 million plumbing and drain company financials it could use and a 13-week cash flow forecast.
Reporting period: January 1 through July 31, 2026
- 3 weeks: accounting cleanup
- 42.6%: gross margin identified
- 13 weeks: cash forecast horizon
Where it started
A plumbing and drain company doing about $1.25 million a year was making decisions from its bank balance. Jobs ran through field-service software, but job costing had not been set up. QuickBooks was mainly being used to record payments, revenue and cash.
The owner needed a dependable view of the whole business: what it earned, what it spent and what would be left to cover upcoming payments. The existing books did not provide that view.
Rebuilding the 2026 books
We used the company's 2025 Form 1120-S tax return to establish the opening balance sheet for 2026. From there, we rebuilt the books for January 1 through July 31, 2026.
Revenue was corrected, direct costs were organized and selling, general and administrative expenses were rebuilt. We reconciled the accounts through July 31 so the income statement and balance sheet could give the owner a consistent view of the business.
The cleanup took three weeks. At the end of that work, the owner had reconciled books, monthly financial reporting and a 13-week cash flow forecast.
What the numbers revealed
For January 1 through July 31, 2026, gross margin was 42.6%. Selling, general and administrative expenses were about 53% of revenue. Overhead was consuming more than the business generated in gross profit, leaving an operating loss of roughly 10% of revenue.
The owner could now see the size of the gap and where to start asking questions: direct costs, pricing and overhead. That is the value of getting the books into usable shape. It gives the next operating decision a financial starting point.
For context, ServiceTitan recommends a 60% to 62% gross-margin target for plumbing businesses. That is a reference target rather than a measured industry average, and cost definitions and service mix affect the comparison.
A clearer view of cash
The balance sheet and cash forecast made upcoming payment obligations easier to see together. The owner could look ahead week by week and compare expected cash with the dates payments came due.
Monthly financials also gave the owner a repeatable way to review performance. Instead of trying to infer profitability from the bank balance, the owner could work from an income statement, a balance sheet and a forward-looking cash plan.
Can you use your numbers to run the business?
If your books cannot tell you what you are earning or what cash you will need next, start there. Talk with Hata Advising's CPA-led team about accounting cleanup, monthly reporting and a clearer view of your business.
For ongoing cash planning and operating decisions, explore our fractional CFO services for plumbing companies.
Sources and measurement
Client identity withheld. Engagement details supplied by Hata Advising. Financial figures cover January 1 through July 31, 2026. Percentages are rounded where noted. Results vary by business.
ServiceTitan: Improving Plumbing Business Profitability: A 3-Tiered Process. Published targets are reference points; cost definitions and service mix matter.