This article is a collaboration with the editors of Landscape Management magazine to explore issues we're hearing from landscape business owners on a regular basis. Each month, a Landscape Management writer interviews one of our team members at McFarlin Stanford. This month's article is based on an interview conducted October 2, 2026 with Ian Hanemann, executive coach and financial analyst at McFarlin Stanford
The best time for landscape companies to start their 2027 budget is now, beginning with a review of the first three quarters of 2026 financial data. Owners can use that data to forecast labor costs, customer payments, pricing and cash flow, then plan hiring, equipment and other major expenses before they strain early-2027 cash flow.
Owners also benefit from organizing their books, tracking labor costs and customer payments, and understanding which jobs are most profitable. As McFarlin Stanford financial analyst Ian Hanemann puts it, “It really is right now.”
Hanemann has been a financial analyst at McFarlin Stanford for two years, working closely with the company’s accounting clients to keep their financials organized. His day-to-day responsibilities include payroll, bank transactions and accounts payable (the bills a company owes). He also works with ACE Peer Groups, run by McFarlin Stanford and the Grow Group, which bring landscape business owners together to discuss their businesses and financials. Hanemann reports on each group’s quarterly financials in the meetings, which provides another level of accountability for ACE Peer Group members and helps owners understand their numbers to make better business decisions.
Key Takeaways
- Start your 2027 budget now. Three quarters of 2026 data are already available to help inform your forecast.
- Track the numbers that drive profitability. Pay close attention to labor costs, overtime, fuel, overhead and how many days customers take to pay.
- Know which jobs make money. Track profitability of your different service lines, such as maintenance, snow and irrigation, by setting up classes (categories) in your accounting system.
- Use financial data to set prices. Compare what each job earns after its direct costs, past performance and regional competitors before setting 2027 rates.
- Plan for seasonal cash flow. Look at previous years to identify slow months, periods when payroll was difficult and times when you relied on a line of credit.
Why Is Now the Time for Landscape Owners to Plan for 2027?
Owners can plan now because three quarters of 2026 data already provide a strong foundation for forecasting. October is the best time to start through November before the holidays hit. Waiting until December can force owners to rush a budget they already know may be inaccurate.
Planning early can also keep unexpected expenses, such as an unplanned truck purchase or administrative hire, from creating cash flow problems in the first or second quarter of 2027. Cash flow is the money moving in and out of the company’s bank account, so a big purchase at the wrong time can leave a profitable company short on cash.
Instead of rushing, owners can use the data they already have to anticipate major purchases, hiring needs and potential cash flow challenges. “Build that budget for 2027 and forecast what you’re looking at, including the maintenance contracts you’ve sold for 2027,” Hanemann says.
Which Financial Numbers Matter Most for a Landscape Company?
The most important numbers are direct labor as a percentage of sales, overtime hours, accounts receivable, operating expenses as a percentage of sales and fuel costs. In plain terms, direct labor is what a company pays crews to do the work, accounts receivable is the money customers owe for work already completed, and operating expenses are the overhead costs of running the business. Hanemann recommends starting with labor and overtime. Labor is one of the highest costs of delivering services, so improving labor efficiency can improve gross profit (what is left after the direct costs of the work) and net profit (what is left after all expenses).
Accounts receivable is another critical metric. Hanemann recommends reviewing it week over week and focusing on how quickly customers pay. “The faster you collect from your clients, the faster money comes in, your cash flow improves, your overall business improves,” he says.
Operating expenses as a percentage of sales can reveal how much revenue the company needs just to cover its fixed expenses, the bills that come due whether it's a busy month or a slow one. Fuel is also important to forecast. The Bureau of Transportation Statistics reports that regular gasoline averaged $4.36 per gallon in September 2026, up 37.6% from September 2025, while diesel averaged $6.29 per gallon, up 67.8%.
How Can Owners Tell Which Jobs and Services Are Profitable?
Landscape companies need financials that show profitability by business segment. Owners can set up accounting classes, which are categories in accounting software that tag each dollar of revenue, expense and labor to an area of the business, such as maintenance, snow and irrigation.
This shows which jobs and customers produce the strongest results and where labor and material costs may be hurting profitability.
“If you don’t separate by class, how are you going to determine which part of your business- maintenance, snow, irrigation- is the most profitable?” Hanemann says.
How Can Financial Data Shape 2027 Pricing?
Base your pricing on gross profit by job, historical data and what competitors charge in the same region. Hanemann recommends comparing this year to last year and looking at the most recent 12 months to account for the seasons of landscaping.
Some companies have gone years without raising prices, even as profitability has declined. Raising prices may mean losing some customers, but it can also improve profitability by keeping the jobs worth pursuing. Of companies that raise their rates, Hanemann says, “Revenue may even be slightly lower, but profitability is so much better because they’re getting the right kind of jobs and valuing their work for what it’s truly worth.”
Owners can also review billing rates throughout the year rather than waiting until the end of a quarter or year.
How Can Seasonal Landscape Companies Protect Cash Flow?
Seasonal companies can protect cash flow by tracking accounts receivable days, the average number of days it takes customers to pay after they are billed and using past years’ data to predict slow months. A company can look profitable on its profit and loss statement (P&L), the report showing revenue minus expenses, and still struggle to make payroll if customers are slow to pay. If customers routinely take 30, 40 or 50-plus days to pay, cash flow may not be sustainable. For a national yardstick, the Credit Research Foundation's first-quarter 2026 survey found a median days sales outstanding (the formal name for accounts receivable days) of 40.12 days among U.S. credit departments. Hanemann says, “Accounts receivable days average has increased across the ACE Peer groups for Q2 2026.” He is encouraging owners to focus on the collection process. Payment speed also varies by type of work: commercial maintenance typically takes longer to get paid than residential, which affects how those businesses price and operate.
Owners can also examine 2024, 2025 and 2026 data to identify historically difficult months. If a company regularly relies on a line of credit, a flexible loan it draws on as needed, during slower periods, it can plan ahead and consider enhancement work or other revenue opportunities.
“You need to be able to predict that cash flow,” Hanemann says. “What enhancement work can you plug in so you’re not bleeding during those non-busy months?”
What Does a Strong 2027 Budget Look Like?
A strong 2027 budget is in depth and involves the entire leadership team, not just the owner. Department heads forecast their areas and own their parts of the budget. Owners then compare actual results to the budget weekly or monthly, so problems such as higher-than-expected maintenance labor costs can be addressed sooner.
“A strong 2027 budget is in depth, and your team is involved in the process of forming it,” Hanemann says.
How Often Do Owners Need to Review Their Books?
Owners get the clearest picture by reviewing their books weekly, rather than monthly or quarterly. Hanemann suggests checking the balance sheet (a snapshot of what the company owns and owes), the P&L, accounts receivable and accounts payable every Monday and Friday. Owners can also record labor costs in the month the work was performed rather than the month it is paid, which is called accruing labor, so financials give a clear, timely picture of performance.
“If you’re not in your financials that often and you try to do it monthly or quarterly, you lose touch,” he says.
Where Can Landscape Owners Get Help with Budgeting and Financials?
McFarlin Stanford offers outsourced accounting services, a three-tier fractional CFO (part-time chief financial officer) service and ACE Peer Groups. These services help landscape companies maintain clean financials, forecast and budget for the future, and use landscape industry benchmark financial data to make better business decisions. ACE Peer Groups hold owners accountable with quarterly financial reporting as well as a confidential space to discuss the business with others who are experiencing the same issues.
Frequently Asked Questions
When is the best time for landscape companies to start budgeting for 2027?
October is the best time to start budgeting for 2027, and November is still good before the holidays hit. Waiting until December tends to rush the budget. By the end of September, owners have three quarters of 2026 data to forecast from, which helps them anticipate major purchases, hiring needs and cash flow challenges before they affect early 2027.
Which financial metrics are most important for landscape companies to track?
Landscape companies can track direct labor as a percentage of sales, overtime hours, accounts receivable days, operating expenses as a percentage of sales, fuel costs and gross profit by job. Together, these show how efficiently labor is used, how fast customers pay and how much revenue covers fixed costs.
How can landscape companies determine which services are most profitable?
Landscape companies can use accounting classes, which are categories in accounting software, to separate revenue, labor and expenses by service line, such as maintenance, snow and irrigation. This shows which divisions earn the most profit and where labor or other costs are reducing profitability across the business.
How can landscape companies tell if they are underpricing their work?
Owners can tell whether they are underpricing by reviewing gross profit by job, labor efficiency, historical pricing and what regional competitors charge. Reviewing billing rates throughout the year, rather than only at quarter or year end, helps surface underpriced work sooner.
How can landscape companies improve cash flow?
Landscape companies can improve cash flow by collecting from customers faster, monitoring accounts receivable days, pricing work appropriately and planning for historically slow months. Reviewing 2024, 2025 and 2026 data shows when payroll was difficult, or a line of credit was needed, so owners can plan ahead.
Who needs to be involved in creating a landscape company's annual budget?
Budgeting works best when it involves the entire leadership team, not only the owner. Department heads understand the financial needs and goals of their divisions, so they can forecast their areas and own their parts of the budget. Involving managers creates more accurate forecasts.
How often do landscape business owners need to review their financials?
Ian Hanemann recommends reviewing the books weekly rather than monthly or quarterly, checking the balance sheet, P&L, accounts receivable and accounts payable every Monday and Friday. Owners can also record labor in the month the work was performed so financials stay accurate.
