APC Bookkeeping

Trades · HVAC contractors

Bookkeeping for HVAC contractors.

HVAC work is seasonal, heavy on equipment, and more and more of it is sold on service agreements paid in advance. Each of those does something different to the books. Here is what, and what I do about it.

168

HVAC contracting businesses in King County.

93%

Of Washington HVAC contractors are LLCs or corporations, the highest share of any trade.

16×

More heating demand than cooling demand around Seattle in an average year.

HVAC · trade profile

2026

Registration

Specialty contractor

Bond

$15,000

Electrical work

06A specialty licence

Refrigerants

EPA Section 608

Workers’ comp class

0307

L&I base rate

$1.9751 / hour

From L&I, RCW 18.27 and WAC 296-46B, checked September 2026.

Seasons

Seattle needs heat sixteen times more than it needs cooling.

Degree days measure how far the weather sits from comfortable. Around Seattle, heating demand runs from October to May and cooling barely registers before July. Your revenue follows the same shape, and so should your cash planning.

Fig. 01Heating and cooling degree days by month, Seattle-Tacoma
HeatingCoolingTune-up season
Tune-up seasonTune-up season
687Jan
588Feb
557Mar
412Apr
2429May
11829Jun
3196Jul
2498Aug
10230Sep
349Oct
555Nov
711Dec
NOAA 1991–2020 climate normals for Seattle-Tacoma International Airport, in degree days (base 65°F): 4,376 heating degree days a year against 265 cooling.

Demand that swings this hard makes some months look like a boom and others like a problem, when neither is true. October compared with July means nothing. October compared with last October does.

The year in degree days

Heating, October to May

4,101

Cooling, June to September

254

Heating to cooling, over a year

16.5 to 1

Service agreements

Paid in March. Earned through February.

A maintenance agreement sold for a year is cash on day one and a promise for the next twelve months. Until the visits are made, part of that cash is owed back in service, and the books have to say so.

Fig. 02One $360 agreement, sold in March
Cash receivedRevenue earnedStill owed in service
$0$100$200$300$400Still owed in service
MarMayJulSepNovJanMar
Illustration. A one-year agreement paid in full when it is sold and earned evenly across the months it covers. Move across the chart to read any month.

Why it matters at scale

One agreement is a rounding error. Four hundred of them, sold mostly in spring, is $144,000 that was never all yours at once. Record it all as income when it lands and spring looks spectacular, while autumn looks like a slump that is not really there.

Equipment jobs

Half the job is the box.

On a heat pump or furnace replacement, the equipment can be the largest single cost on the job. When it is, a small slip in what you paid for it moves the margin more than a long day of labour does.

Fig. 03One $18,000 heat pump replacement, costed
$18,000Contract
Equipment$8,20045.6%
Install labour$3,30018.3%
Line set, pad and materials$1,2506.9%
Electrical subcontractor$1,1506.4%
Permit$3001.7%
Overhead share$1,80010.0%
Profit$2,00011.1%
Illustration. A hypothetical job. The circuit and disconnect are shown as subcontracted because the 06A HVAC electrical specialty does not cover branch circuits or disconnects outside the equipment.

Where the margin hides

A 5% slip on the equipment in this job is $410. That is a fifth of the profit, gone before the crew arrives.

Rebates

A rebate paid to you is a receivable.

When a utility or manufacturer rebate comes to you rather than to the customer, the customer pays less at the door and someone else pays the rest, later. Until it arrives, that money is owed to you, and it needs chasing like any other invoice.

Fig. 04One invoice, two payers
12
1At completionThe customer$16,500The price after the rebate comes offCollected so far 92%
2After the claim is approvedThe rebate programme$1,500Owed to you until it arrivesCollected so far 100%
Illustration. Rebate amounts, rules and timing vary from one programme to the next.

Keeping both payers straight

L&I premiums

The one cost that moves with the season.

L&I charges workers’ comp for every hour worked, not as a share of wages. HVAC work, class 0307, is $1.9751 an hour in 2026. In a quiet month with fewer hours worked, the premium falls with them.

Fig. 05What L&I costs a crew in 2026
L&I premium a year, class 0307$18,961
Paid by the business$15,696Deducted from workers’ pay$3,265
The same crew in other risk classes
Roofing0507 · $5.7930 / hour$55,613
HVAC0307 · $1.9751 / hour$18,961
Plumbing0306 · $1.8222 / hour$17,493
Electrical0601 · $1.4370 / hour$13,795
Clerical office4904 · $0.2223 / hour$2,134
L&I 2026 base rates per hour worked, at an experience factor of 1.0. Your own rate moves with your claims history. L&I counts a full-time year as 1,920 hours. Drag either slider.

Built into the labour rate

At just under $2 an hour, the premium is small per hour and large per year. It belongs in the loaded labour rate you bid with and in the cost of every job, not in a lump at the end of the quarter.

The work

What I actually do about all this.

I keep the books. I do not file your taxes and I am not your CPA. What I do is make sure the numbers behind every one of those filings are right, and hand your tax preparer statements they can work from without rebuilding anything.

Where to start

Behind on the books, or not sure they would survive a look? Start with cleanup. Running fine but want them kept right? Start with monthly.

Questions

Questions HVAC contractors ask.

Don’t see yours? Email me at paulaleksic@apcbookkeeping.com

If you want monthly numbers you can trust, yes. The cash arrives up front, but the work is spread across the year. Recording it as service still owed and moving it into income month by month keeps spring from looking better than it was and autumn from looking worse.

As money owed to you by the programme, recorded when the job is invoiced and cleared when the payment arrives. That way an unpaid rebate shows up on a list instead of disappearing into a lower job total.

Yes, as long as each purchase is tied to a job. A purchase order or job number on the supplier invoice is enough for me to put the cost on the right job.

No. Payroll and the quarterly L&I report stay with a payroll provider, and I can introduce you to one I trust. My side is making sure the wages, taxes and premiums it produces land on the right jobs and in the right accounts, and that what L&I billed ties out to the hours in your books.

With cleanup: rebuild the ledger from your statements, reconcile every account, and find out where things really stand before anything else is filed. Multi-year cleanups are routine work here, and once they are done the monthly routine keeps the books from slipping again.

Book a free consult

Tell me where the books stand.

Fifteen questions about your business and your books. I read every one personally, and you get a straight answer about what it would take to make your season, your agreements and your jobs readable.