When you’re a tradie running a business, you have a lot of hats to wear…and we’re not just talking hard hats! Apart from being on the tools, you’re also often project manager, customer service manager, head of human resources, and even the bookkeeper. Although it might seem more cost-effective to do it all yourself, is it really? In this article we’ll explore the benefits of professional bookkeeping for tradies, as well as other tips and tricks to save you time and money.
Benefits of outsourcing your bookkeeping tasks
Bookkeeping services can save you time
- Professional bookkeepers have expertise in the popular accounting software programs and apps so they can ‘do the books’ quickly.
- An experienced bookkeeper can provide insights on how to improve your bookkeeping processes so they are more efficient.
- ‘Once in a while’ bookkeeping tasks for you are things a bookkeeper does everyday, so they have the knowledge to complete them easily.
- A tradie bookkeeper understands the nuances of contractor payroll, taking the stress out of making sure you’re complying with ATO rules (eg taxable payments annual reports).
- You won’t have to procrastinate late at night (and weekends) putting off doing the books…get your life back!
Bookkeeping services can save you money
- A bookkeeper’s hourly rate is generally less than a tradesperson’s, even more so when you can save with a fixed fee bookkeeping package.
- Getting invoices issued and paid on time can help with your cashflow and prevent you from needing to access expensive loan facilities to cover expenses.
- Paying your own bills on time prevents you wasting money on late fees and keeps you in good repute with your suppliers (keep those trade discounts).
- Ensuring your business activity statements (BAS) are lodged – and GST paid – on time avoids incurring fines from the ATO.
- A bookkeeper can save you money when it’s time to visit the accountant – your books will be current and accurate.
- Having the books up to date in real time gives you a clear picture of the financial health of your business so you can make informed business decisions…fast.
Over 80% of tradies say they would be more successful if they had better bookkeeping practices (Xero, 2020)
Interested in hiring a bookkeeper for your trade business? We have been providing bookkeeping services for tradies and small businesses for over 10 years. Call us on 1300 728 875 or send us a message to discuss your needs.
Bookkeeping for tradies tips and tricks
Use job numbers
- Give each job a unique number when you prepare a quote.
- Train your employees and contractors to use this number on purchase orders and work orders.
- Assign the job number to purchases and contractors so you can track costs.
- When it’s time to bill clients, you would just need to pull up a report for each job number. This will give you the total cost for that job. All you would need to do then is calculate your mark-up rate and invoice the client.
Use job costing software
You can speed up the job invoicing process by using job costing software. Job costing software can simplify the bookkeeping tasks for tradies.
- Most job costing software tracks the time and purchases for each completed job.
- Employees and contractors can enter the time they spend on each job through their phones.
- When you’re ready to invoice your clients, the program will calculate your mark up for purchases and time on the job.
Ideally you want to choose job costing software that integrates seamlessly with your accounting software, such as Xero, MYOB, or Quickbooks. Add-on mobile apps like Tradify make it easy for tradesmen (and tradeswomen) to quote, schedule and invoice jobs on the go.
Scan and send expense receipts
The financial paperwork can be overwhelming if it gets out of control. Instead of keeping a folder of printed receipts that can fade over time (and are notoriously easy to lose), whenever you or your team incur a business expense, scan it into your phone and send it to your accounting software. That way it’s ‘in the system’ when it comes time to reconcile your bank accounts or invoice a client.
Although technology and software do help with tradie bookkeeping tasks, it still makes better financial – and time management – sense to outsource these services to professionals.
Accountants for tradies
Occasionally you may want to seek the services of an accountant for financial advice. For example, as your business grows and you want to expand, or when economic conditions aren’t so favourable. An accountant experienced working with tradies can help you setup the most advantageous business structure, provide strategic tax planning advice, and help you with financing large capital investments. They can also assist with your own personal financing and tax advice as a self-employed business owner.
If you’d like to discuss your accounting needs, give us a call on 1300 728 875 or send us a message for an obligation-free consultation.