Solar business bookkeeping

Each install is set up as a job in your accounting software, and its costs are recorded against it as the bills arrive. Once the job is finished, its costs are set against the price the customer agreed to, so you can see what the install made before overheads.

• Panels, inverters and batteries, at the cost of the stock used
• Racking, cabling and switchgear
• Subcontracted installers and electricians, from their invoices
• Equipment hire, such as scaffolding
• Travel and freight for that job

Where an STC amount from your agent or trader relates to the job, it can be shown against the job too, recorded the way your accountant specifies. A bill that arrives after the job is invoiced, such as late freight, still goes against the job, so a finished job's figures can change.

Whether a share of overheads, such as vehicles and insurance, is spread across jobs is a choice for you and your accountant. Either way, finished jobs side by side show which kinds of install tend to leave less margin than others.

Where an install is paid in stages, such as a deposit when the quote is accepted and the balance once the system is in, each payment is recorded against the job as it reaches your bank. The job then shows what the customer has paid and what's still to come.

• The deposit received, and the date it arrived
• Each progress payment, and the stage it relates to if your terms set stages
• A settlement from a finance provider, where the customer has used one
• The balance the customer still owes

How a deposit taken before the install is recorded, as income when it arrives or as money received in advance until the work is done, is for your accountant to specify. We record it that way, and it stays against the job either way.

Some jobs change after the deposit. If a customer cancels, or the scope and the price change, we record the refund, the kept deposit or the revised price as you decide, with the treatment your accountant sets.

The books can then show the jobs that have a deposit but no install yet. That shows the work you've committed to, and the money you've already taken for it, side by side.

Small-scale technology certificates (STCs) are an Australian Government incentive under the Small-scale Renewable Energy Scheme. The Clean Energy Regulator says they can be earned when an eligible system, such as solar panels or a solar battery, is installed. The system owner can create them, or assign the right to create them to an agent registered with the Clean Energy Regulator, which might bring an upfront discount on the system.

Where your agreement with an agent or trader provides for a payment to your business, that amount is owed to you separately from what the customer pays. For each job, the books can show:

• the amount due under your agreement, and which agent or trader owes it
• the payment that settled it, matched using the payment details they send
• any difference between the amount expected and the amount paid, flagged for you to take up with them

One payment from an agent may cover several jobs, so each part is matched to its own job rather than left as a lump sum. Amounts still owed sit on your list with the rest of what the business is waiting on.

We don't work out a system's certificate entitlement. The Clean Energy Regulator explains that the number of certificates depends on factors including the system's location, its installation date and the electricity it generates or displaces. We record the amount your agreement or the agent's statement shows, and how and when it's recognised in your accounts is your accountant's call.

Stock bought in bulk is recorded as it arrives, from the supplier's bill and delivery note, and moved to a job as it's installed. Your software then shows what should be on hand, and what each job used.

business.gov.au describes two ways to track stock: a periodic system, where stock is counted by hand and the records updated manually, and a perpetual system, where software updates the records each time stock is bought or sold. Which suits your business is a decision for you and your accountant.

business.gov.au also suggests regular stocktakes, noting that most businesses do them monthly or quarterly. A stocktake is a physical count, and it shows whether the items on hand are the ones your records say you have. When a count and the records differ, these are worth checking first:

• a panel or battery used on a job but not assigned to it
• stock returned to a supplier, with the credit still to come
• units damaged in transit or during an install
• items used on warranty or callback work

We adjust the records once you've confirmed what happened. Credits for returned stock are tracked against the supplier until they're paid or applied to a later bill.