Business Advice

5 bookkeeping basics for the construction industry

- July 30, 2020 3 MIN READ
bookkeeping tradie

Did you get into a trade because you enjoy working with your hands? Bookkeeping for trades can be very time consuming regardless of whether you’re a plumber, carpenter, electrician, bricklayer or painter.

With the right bookkeeping plan, you’ll be able to spend more time working on-site and spend less time focusing on business administration.

Let’s be honest, there are very few people that enjoy looking at the books after coming home from work. Whether you’re an electrician, painter, plumber or carpenter, bookkeeping tests the patience of the best of us.

Being on top of your bookkeeping is key to understanding your business and keeping the tax office away. It’s a mandatory part of running a business, so you’ll want to make sure you’re using the best tool for the job.

Keeping everything organised is the key to success with bookkeeping. Having your finances and paperwork properly ordered will save you time when the end of financial year rolls around.

Here are some bookkeeping basics you should work on sooner rather than later.

1. Discuss things with your accountant

Finding the right accountant that you can work with means they’re no longer just a painful expense. They’ll take the time to understand your business and help you manage all your paperwork.

They will be able to take you through the types of forms, reports and other documents which need to be completed, and when they’re required, so you’re clear on what you need to get done.

Being proactive with this sort of thing allows you to set aside time in the future to focus on it and you won’t have an accountant calling you while you’re out on-site.  In turn, you’ll save time and money.

Your accountant will also be able to provide great insight into how you can run your business more smoothly from an administration perspective.

2. Stay involved in the process

As valuable as accountants are in maintaining your paperwork, it is crucial that you don’t just step out of the conversation entirely. Spending time learning about your income and expenses forces you to think more about it and identify opportunities that may not be realised by anyone but a business owner.

Stay involved to at least a minimal extent so that you always know what’s going on in your business and if there are any potential cash flow or legal issues to worry about.

Being across the bookkeeping activities gives you a great perspective on your business operations.

3. Keep and organise paperwork

Paperwork builds up fast while you’re out on-site. Don’t throw it away though, creating a system to manage your paperwork helps minimise the stress and confusion when you’ve got to track something down later.

In the event that your business is audited, having all this paperwork on hand will be helpful for staying out of trouble.

Having older financial paperwork is also a learning tool. As a business owner, you’ll be able to see what has or hasn’t worked and base future decisions off it.

Stock up on folders and get to work creating a category system based on years or paperwork types. Some of the dividers or folders work wonders to get all your paperwork in order.

Using your phone you can also take photos of documents to be able to manage them all online. This way, you’ll always have them available and safely stored, yet don’t have to worry about losing them or taking up space.

4. Be consistent

Just like when you’re on the tools in your trade, delivering consistent work is a great habit to get into and delivers benefits in the long run.

Setting aside time once a week or fortnight to update paperwork will make life so much easier.

This way you can get on top of everything before it gets out of control.

It also means that if there are any issues you’ll spot them quickly and will be able to address them right away.

5. Utilise quality technology

Take the time to learn what technology is available to you and to understand it. A lot of modern software can greatly cut down on your bookkeeping time and organise everything more effectively.

MYOB’s free trial for their online accountancy software will give you the chance to test it out and see how it fits for your business. These trials have no commitment and you get the chance to test all the features before investing. It doesn’t matter if you’re a plumber, carpenter, builder, electrician or a tiler, all of trade and construction businesses face the same issues.

Solutions such as those offered by MYOB have features like inbuilt receipt scanning and document management which make it a cinch to handle expenses and receivables.

This kind of software can also be set up to automatically send detailed reports and other information straight to your bookkeeper or tax agent (meaning less heavy lifting on your end).

Do make sure to double-check your work for accuracy though, even when using tech, as human error can occur if you input details incorrectly.

Utilise your software to run reports each week and that way you’ll pick up on errors you may have missed at the time.

Hopefully, as a tradesperson this helps you get on top of your books and back on the tools!

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