The Tax Move Every Roofing Owner Misses Before December 31

"Mareaka, is there a difference between cash flow and taxable income?"

You worked all year, crushed jobs, and brought in solid revenue — but if you’re not tracking where your money actually went, tax season might hit harder than a summer hailstorm.

The problem isn’t your income — it’s not understanding the difference between cash flow and taxable income.

Before we get into it, here’s what we’re really talking about this week — the difference between looking profitable and actually keeping more of it.

What We're Talking About

Why cash in your bank doesn’t always match your taxable income.
How timing and planning before December 31 can prevent a surprise tax bill.
Why smart contractors manage profit, not just purchases.

Before we dive into it, let me introduce myself if we haven’t met yet.

I’m Mareaka from Bunch Accounting, and I specialize in helping roofing and HVAC business owners like you make confident, profitable decisions.

Most roofing and HVAC business owners focus on what’s in their bank account, not what the IRS sees on paper.

The two numbers rarely match, and that gap is what creates those painful surprise tax bills every spring.

Knowing how to manage the difference between cash in your hand and taxable profit is one of the smartest moves you can make before year-end.

Reality Check

Here’s the truth — you can be short on cash and still owe taxes -- Or flush with cash and owe taxes.

It all comes down to timing.

For example, say you get paid for a big re-roof job in December → money hits your bank now, but expenses for materials might not clear until January.

That creates taxable income today, even though your costs haven’t hit yet.

Or maybe you fronted a ton of material and labor costs in November, but the homeowner won’t pay until January.

You’re out the cash now, but your books might show no taxable income yet.

Either way, if you’re not watching both sides, your books and your bank account start telling two different stories.

So what to do?

The fix starts with timing — and planning ahead. Before December 31:

Review your unpaid invoices and unbilled work.
Check what materials or subs you’ve already paid for that won’t hit revenue until next year.
Work with your accountant to forecast how those timing differences affect your taxable profit.

That’s how you avoid writing a surprise check to the IRS in April.

One of my roofing clients had their best year ever — $1.2M in revenue.

Cash was strong, so they thought they were set.

But when we looked closer, $150K of their deposits hit before year-end while materials didn’t get invoiced until January.

Their taxable income was inflated, and so was their tax bill.

After we adjusted how and when jobs were invoiced and tracked expenses, they dropped their April tax bill by over $20K the next year.

Your bank balance tells you if you can make payroll. Your financials tell you what the IRS will tax.
The sooner you learn to connect the two, the faster you’ll stop getting blindsided every spring.
If you don’t have a year-end plan to line up your cash flow and tax reality, this is the month to get one.

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