Bookkeeping can be a tedious task for small business owners, especially tradies. We get it. Nothing is more boring than doing the “books” after a tough day on the tools. But you do need to keep your books in order. It will make your life easier. Here are four tips to make bookkeeping easier for tradies:
Separate Personal Banking from Business Banking
It is common for business owners to use their personal bank account for business purposes, but it is recommended to separate the two as soon as possible. By separating your personal and business finances, it will make it easier to prepare for tax time and will also help you keep track of how much money you have invested in your business and how much you have taken out for personal expenses. If you are a sole trader, the ATO doesn’t really mind if you have one bank account but it will make your life more difficult.
Keep All Receipts
You may be unaware of some tax deductions that you qualify for, so it is important to keep all receipts. It is even more important that you keep receipts for those purchases that you know are a tax deduction. For those purchases you’re not 100% certain about, keep the receipt and run it past your accountant before tax time. Storing your receipts in a shoebox is better than nothing, but it’s probably better if you scan your receipts and store them online.
A lack of cash flow is one of the main reasons small businesses fail. It is important to invoice promptly to ensure that you have money coming in regularly. The earlier you invoice a client for work completed, the earlier you get paid. By invoicing promptly, you will also reduce the stress of having to invoice a large number of clients at one time. You won’t miss things, you’ll invoice for everything done and you won’t have to reissue invoices if you accidentally invoice the wrong people for the wrong work.
Get a Bookkeeper to Help Manage Your Receipts and Accounts Payable/Receivable:
Bookkeeping can be time-consuming and tedious, and it’s easy to miss important details. We’ve also seen too many examples of bookkeeping causing friction in relationships. Too often a sole trader has his wife “do the books” on the weekend. It is not their area of expertise and sometimes things get missed. This can cause arguments sometimes. A professional bookkeeper can help you keep track of your finances , including your receipts, accounts payable, and accounts receivable. Books that are updated and maintained regularly mean you are prepared for tax time. Regularly updated books also give you better insights into how your business is actually going.
Are you a tradie looking to get a bookkeeper? We’d love to have a chat. Get in touch for a no obligation chat so we can discuss how our services can improve your business, including properly setting up the right accounting software for your business. Get in touch today.