How to see profit by service line without a cost-centre system

Many service companies run two or three lines of business under one roof: pest control and deep cleaning, maintenance and installation, residential and commercial. Ask the owner which line is more profitable and the honest answer is usually a guess, because all the revenue lands in one "Sales" account and all the costs in a handful of expense accounts.

You do not need a cost-centre or analytic-accounting module to fix most of this. You need a slightly better chart of accounts and a rule for which account each sale and cost goes to.

Separate revenue first

Revenue is the easy half. Create one income account per line of business:

• Service revenue: pest control
• Service revenue: deep cleaning
• Product sales

Then make sure every sale reaches the right one without anyone choosing it by hand. People choosing accounts on each invoice is how the split decays within a quarter. The reliable way is to decide by category: every service in the "Pest control" category posts to pest control revenue, every service in "Cleaning" to cleaning revenue. When someone adds a new service to a category, it inherits the right account automatically.

Then the direct costs

Direct costs are the ones you can trace to a line: chemicals for pest control, cleaning consumables, subcontracted labour for a specific job. Give them the same treatment: expense categories mapped to their own accounts.

• Chemicals and treatments → cost of sales: pest control
• Cleaning consumables → cost of sales: cleaning

When a purchase or an expense is categorised, its account follows. Your profit and loss now shows a gross margin for each line of business.

Be honest about shared overhead

Rent, the office team, the accountant and the owner's car are shared. You can split them by a formula (by revenue, by hours, by headcount), but every formula is an opinion, and a profit and loss that allocates overhead by opinion often starts arguments rather than decisions.

A practical approach for most owners: compare gross margin by line, and treat overhead as the cost of running the company as a whole. If one line earns a 45% gross margin and the other 20%, you already know where to push, and no allocation formula will change that conclusion.

Keep the jobs attached

Revenue by category only works if every invoice knows what was sold. The weak point is the handover from quotation to job to invoice: if the invoice is typed from scratch, the product, and therefore the category and account, is often lost. Make sure the invoice is created from the job, carrying its products with it.

Instalment invoices on mixed jobs are the one awkward case. If a job includes both pest control and cleaning and you bill it in three instalments, each instalment belongs to neither line alone. It is better to leave such an instalment unattributed and review it than to guess and distort both lines.

What this does not give you

This approach gives you revenue and gross margin by line of business. It does not give you a separate balance sheet per line, or automatic overhead allocation. If you need those, you need a genuine cost-centre system, and the extra bookkeeping that comes with it.

How Orbit handles it

In Orbit's accounting, revenue and cost accounts can be mapped per product category and per expense category, so each line of business posts to its own accounts without editing products one at a time. Quotations carry their products to jobs, and jobs carry them to invoices, so the account decision survives every handoff. Orbit deliberately does not allocate overhead; lines of business are separated by account, and the profit and loss shows each one.

The cleaning workflow shows how this looks for a company running cleaning alongside another service.