- Posted by Ally Roos
- On 16/09/2019
The challenges facing tradies across Australia are many and varied, but the one that’s causing the most anxiety is accounting. If you’re a tradie, you’d know that the sheer amount of number-crunching and paperwork involved can be overwhelming, especially when you’re busy. However, you don’t have to do this on your own. If you haven’t met with an accountant, there are seven major reasons why should do so right away.
1. Gain access to in-depth expertise
While do-it-yourself accounting may seem like the cheapest option, it’s easy to do it incorrectly. There’s a lot of paperwork that goes into accounting, and it also requires learning hundred-page tax codes and business planning. If accounting falls outside your expertise, it’s better to leave it to an accountant who specialises in serving tradies. Not only will they manage your books, but they’ll also use years of industry experience to improve your bottom line.
2. Deploy the right systems and processes early
To optimise your business, accountants will implement processes and systems that suit your business. For instance, they may install accounting software like Xero, QuickBooks, or MYOB Online and pair them with job management software like WorkBuddy to streamline expense tracking. They’ll then clean up your databases and establish proper data entry practices to reduce bookkeeping headaches in the future.
3. Streamline tax processes
Lodging end of financial year tax returns can be a stressful time. You need to compile income statements, collect receipts, claim deductions, and fill out a stack of forms. Seeing an accountant relieves the pressure and streamlines the tedious processes associated with taxes.
Accountants can prepare your financial reports, tax returns, and other supporting documents. They can also keep track of deductions you can rightfully claim. For example, they may calculate vehicle expenses, training courses, clothing, tools, and equipment maintenance to maximise your returns. Finally, accountants make sure your tax returns are submitted on time to prevent serious fines and audits.
4. Ensure compliance
Complying with local, state, and federal regulations can be challenging when tax rules are constantly changing. What’s more, your growing trade business may even cross over into a new tax bracket, which comes with a new set of requirements. Staying on top of these changes and knowing their implications to your business is what accountants do.
Accountants give you the most relevant tax information, so you won’t have to spend countless hours doing it yourself. They can even audit your business and minimise potential tax liabilities that lead to expensive noncompliance penalties. Consulting with an accountant regularly should be standard practice if you want your business to be fully compliant.
5. Make informed business decisions
There are so many moving parts in a business that it can be tough to formulate a solid growth plan. Fortunately, accountants are well-equipped to be strategic advisors to your company.
Watching over your finances gives them unique insights into your operations. They can analyse cash flow and forecast your financial trajectory so you can make informed decisions.
If you have accounting software, accountants can also create detailed dashboards to track your business’s growth in real time. This allows them to keep an eye on key performance indicators (KPIs) and advise you accordingly.
Should you hire more contractors to meet increased demand during the busy season? Does it make sense to purchase new tools and equipment with your current budget? These are the kind of questions a detailed analysis from an accountant can answer.
6. Manage cash flow efficiently
The key to a successful business is to maintain a healthy cash flow. Ideally, your trade business should be making more than it’s spending per job. If your books are regularly edging into the red, you need to consult with an accountant right away.
Accountants look for bottlenecks in your accounting process that may be causing poor cash flow. For example, the contractors you hired may be taking longer to send invoices, resulting in delayed payments. Suppliers may also have short payment deadlines, increasing your monthly expenses.
In such cases, accountants will implement enterprise-grade tools and strategies to quickly reconcile accounts and streamline the invoicing process. This way, you get paid faster, payroll is smoother, and suppliers are happier.
7. Save time
The most compelling reason why you should work with an accountant is to free up your schedule. Tradies’ days are packed with meetings, inspections, driving to job sites, not to mention doing physical labour. If finance and administrative processes are thrown into the mix, it becomes extremely difficult to provide high-quality service to clients.
By delegating finance-related tasks to an accountant, you can devote more of your time on core responsibilities. It also leads to a healthier work-life balance, which many tradies struggle to achieve without an accountant.
No matter the size of your business, working with an accountant is a no-brainer. If your trade business is looking for a job management platform with accounting integration, contact WorkBuddy now. Our feature-rich job management system is capable of integrating with your favourite accounting software from Xero to Quickbooks, MYOB and more.