As a tradesperson, you went into business to spend your time out on the tools. What you didn’t expect to be doing, was spending your evenings and weekends sending invoices, quoting for jobs, or chasing payment for the job you finished last month.
Welcome to the world of being a business owner. But in recent years, thanks to the rise in cloud-based systems, running a trades business doesn’t have to involve hours of work sat at a computer being your own administration assistant.
Having worked with many trades-based business owners, here are my top tips for reducing paperwork and freeing your Friday nights to spend on yourself, rather than your business.
It’s important to keep your personal and business expenses separate, so ensure you set up different bank accounts.
Additionally, open another account and put money away for your tax liability, making it less painful when it comes to tax time.
Pay all your business expenses from your business account; you’ll thank yourself at the EOFY and it makes your day to day bookkeeping a more streamlined process.
We’re confident in saying that if you’re a tradie, your vehicle’s glovebox is probably full of receipts. Not only does it become messy and almost impossible to track expenses, they’re likely to have faded by the end of the financial year when it’s time to lodge your tax return.
Unfortunately, bank statements are not a replacement for receipts.
You’ll need a receipt to claim deductions, so it’s time to harness the power of technology and store your spending electronically. Take photos using your phone and save the documents to your accounting software transactions.
If you struggle to do this, sign up for accounts with suppliers as they usually keep receipts of your transactions as a backup.
With the rise in cloud-based accounting software, there came a rise in the availability and type of online applications that make working in any industry a more streamlined and efficient process.
And for all the tradies out there, there are a bunch of apps that make quoting, invoicing and getting paid effortless. Now you can quote and invoice on the job via your phone, meaning invoices won’t get lost or forgotten.
Faster quoting means you’ll hopefully get the job that the less tech-savvy tradie took three weeks to send his paper quote on, and faster invoicing means faster payment.
We all know that cash is king, so staying on top of your debtors is vital.
Most online accounting programs will have a built-in payment reminder component, meaning you don’t have to make those awkward phone calls chasing payment from the job you completed weeks ago.
Your online accounting software should also have built-in reporting that highlights who still owes you.
By having proper terms and conditions drawn up for your business, it makes recovering debt (if necessary) easier if you have to take legal action.
Take control of your business.
Review your accounting software at least once a month to see how your business is running. By doing so, you’ll be able to nip any issues in the bud before they become too big.
You’ll be able to see a snapshot of any unnecessary expenditure, outstanding debtors, suppliers you haven’t paid, and your best income streams, to name a few.
You’ll have a better understanding of your business and be able to sleep at night knowing you’re in full control of your business.
Want more insight into how to best run your trades business? Check out Carbon’s seminar in Perth: ‘Tradies and the Ladies‘ this 30 November.
Carbon’s Michelle Maynard will be joined by four other industry experts, all sharing their top tips on ensuring your business is running like clockwork.
MYOB clients can receive a 20 percent discount using the code ‘MYOB20’.