As a tradie, your aim is to grow and expand your business through new opportunities. While some tradies do it through the creative execution of new projects, others might need to adopt more traditional methods. These traditional methods include cutting costs in different areas as well as maintaining their business’ bookkeeping themselves.
If you’re a tradie just beginning with bookkeeping, read this article 6 reasons important strategies why you should do bookkeeping for tradies yourself.
Why Should Tradies Do Bookkeeping?
In order to understand your business, doing your bookkeeping by yourself is essential. With all the records in front of you, you can delve deeper and devise strategies that work better for your growth. It also makes you aware of the money that is coming in, and the money that is going out.
Bookkeeping can help you cut short a lot of money. And in order to maximise your profit, you need to minimise your expenses as much as possible.
Moreover, bookkeeping for tradies is easier than you may have thought. With various software programs and mobile applications, you can determine the cost-benefit ratio in a jiffy. Besides, it is going to help you keep a better eye on your business performance, giving you a better insight into things.
Tradie Bookkeeping Solutions
There are various ways to execute bookkeeping. Let’s analyse each of them to help you understand what you exactly need:
There is the traditional method of using paper and pen. However, this method is not safe enough to avoid mistakes, particularly when you are a beginner.
Maintaining Excel Sheets
You can use excel sheets to keep your books and solve complex accounting problems.
The best way to foolproof and convenient bookkeeping is using technology and that means you have software with you. There are several software applications that can make the job super easy for you.
Xero & Hubdoc
If you are looking for a simple tool, then Xero is the best option for you. Hence, with a bookkeeping application on your phone, maintaining transactional records becomes smooth and convenient.
Alongside Xero, Dext Prepare can be another option for simplified bookkeeping. Dext had been previously known as Receipt Bank and right after reaching the record 1 million users, the brand was changed to this new name. In order to handle your complex financial paperwork, Dext Prepare only takes fractions of seconds to calculate and show the most reliable results.
But which of these two should you go for? Let’s analyse them here with all the pros and cons.
Hubdoc vs Dext Prepare
|Pricing is the main concern for small businesses and when it comes to this, Hubdoc subscription is included in Xero business plan with no extra charge.||Dext can be a little perplexing as it comes with three different pricing plans depending on the features that you want to unlock.|
|Hubdoc comes with optical character recognition technology. It means you can convert documents into written data and search items easily.||Dext can only scan photos and extract data. However, you only need to drag and drop the photo and the software will scan it without any hassle.|
|Hubdoc can be integrated with Xero, QuickBooks Online, and Bill.com. For any other software, you are required to import data manually. However, it is great for companies that are already using Xero.||Dext can be integrated with Xero, QuickBooks Online, SageOne, FreshBooks, MYOB Essentials, Kashflow and Gusto payroll. Hence, more software integration choices and easy bulk payments.|
|The user control system is not as efficient as any businessperson would like.||You can control user access and choose which user can see what.|
|Hubdoc is slightly below the curve when it comes to customers’ choices and good reviews on the basis of application usage.||With a simple and user-friendly interface as well as a smooth app, Dext has more positive user reviews.|
Generating Invoices and Getting Paid Quicker
Invoices are made to keep a record of all the sales, helping you in efficient bookkeeping. From managing your finances to facilitating your customers, generating invoices is a great way of trading for both the seller and the buyer.
When you keep a track of your sales through invoices, your business becomes easier and you can focus more time on what you’re skilled at. That is because you can keep an eye on material costs and customer payments enabling you to make better decisions with suppliers, sub contractors and customers.
Moreover, invoices can help you keep easy track of payments due from customers. Using them enables you to request payments and recover the overdue amount easily. Besides, when you issue an invoice, the customers know that they must pay quickly. In this way, it becomes an effective way to do business.
Bills Input / Payments
Using a mobile application for bookkeeping can simplify the job for you. You can keep track of your bills and payments. Software apps like Hubdoc or Dext can facilitate you in this regard without you having to input data manually. Moreover, the integration of internet banking with your mobile application can be a huge plus when you have to make bulk payments to suppliers.
Payroll and Superannuation
Handling payroll is one of the most complex tasks. It involves distributing salaries, transferring the payment on time, deduction of taxes and contributions as well as keeping a track of each expenditure for fair tax records. However, using modern software applications can ease the perplexing situation for you.
Here are a few tricks you can use to streamline things more efficiently.
SuperStream is a reporting framework to transmit superannuation payment information electronically. Some software allows employers to transfer their employees’ super guarantee and meets the reporting requirements at the same time.. Hence, bookkeeping and taxation become convenient.
Single Touch Payroll
You can use a single touch payroll enabled software for payroll transactions and all the details are shared with the government without you having to report it. The service is a great initiative from the Australian Taxation Office, and it is obligatory to use.
Tax Payment Annual Report
With bookkeeping software programs, you can submit your TPAR easily as it helps you tracking all sub-contractor payments throughout the year and save you a lot of time during the reporting season.
Effective Bookkeeping Strategies
In order for you to make you bookkeeping more effective and accurate, make sure that you keep a slot every week for it. When you have a slot every week, you can recall things from memory as well as your personal records. This way, it becomes easier for you to do the job in small chunks rather than facing the bulk at the end.
Keep a keen eye on the progress and try to understand anything going wrong with financial matters. Identifying such issues at an early stage can give you the advantage of timely remedy. Through effective bookkeeping, you can look over any discrepancies in transactions at the initial stage.
Moreover, you may review the financial position of your business cost-profit ratio as well as the sales ratio between various goods or services.
Why Choose Professionals?
As a Tradie, are you still confused about where to begin with your bookkeeping? We work with all types of trades people acting as their tradies accountant consulting with them on different parts of their business. Don’t feel like your question is too small, get in touch with IJ & EA today for an effective consultation to eliminate any doubt.