Whether you’re a plumber, electrician, construction worker, mechanic or carpenter, every tradie needs the right tools for the job.
So why is it so useful to be running your trade business using proper cloud accounting software? Let’s look at the needs of your industry and how proper cloud accounting software can help…
1) Invoicing and job estimates on the go
One of the primary methods of getting paid as a tradie involves the dual tasks of quoting and invoicing.
While you can always use an invoice template, or quote manually, (filling documents out individually, then emailing them to a client) this is the most cumbersome and inefficient option you can choose.
Manual invoicing not only takes a decent chunk of your time, it’s also slow, inefficient and requires a glut of manual error-prone tasks.
For example, once you issue an invoice you still need to input this into accounts receivable ledger as an asset. Once you get paid, you then need to remove it from accounts receivable and input this income into your books to stay on top of compliance and cash flow management.
On the other hand, affordable accounting software takes care of this with ease. With inbuilt online invoicing and job estimates, you can fire off a quote and then easily ‘accept’ or ‘decline’ it.
Once a quote is accepted, and the job is done, you can fire off an invoice, right there in your client’s driveway. When you do so, the invoice is automatically recorded in your accounts receivable.
Once paid, your cash shows up in your income and with automatic bank feeds, your cash flow is recorded and ready for reporting and tax time.
“With Reckon One, when I leave the job’s done, wrapped, finished, invoiced, and I’m out of there, on to the next job, making money again”– Jason Chivers, Jaycee Plumbing & Gasfitting, based in Bendigo, Victoria.
2) Easily manage your expenses and receipts
Almost all tradies have a serious amount of work expenses. From tools and vehicles, to materials, every tradie needs to record all business expenses diligently and thoroughly.
Not only will you need detailed and accurate records for calculating profits, you also need to record expenses to claim when you process your tax return.
The ATO will also require that you retain proof of your expenses, such as receipts, to ensure your claims are legitimate.
Many busy tradies choose to do this using excel. But beware: any ‘shoebox accounting’ (which entails keeping physical receipts and recording your expenses on a physical spreadsheet) is a rather dangerous way of tracking accounts payable.
Not only are mistakes common and calculations cumbersome, you also risk of losing your proof if you misplace your data or device.
By using accounting software for expense tracking, you can easily store soft copies of your receipts while expenses are all managed and tabulated securely within your cloud software.
Better yet, once you have expense data in your software, you can run reports like profit and loss and cash flow within seconds. (This also means taxes are a breezy affair because it’s all right there, ready to go and completely accurate.)
3) Job management
Naturally in most trades, each job comes with its own expenses, profits, invoices, and financial information. When you use software that includes job or project management, you can easily parse out the details of each individual job.
This way you can report on the profitability of each job, find your best customers and suppliers, and have all of the pertinent financial information in one place for easy reference and use.
4) Payroll simplicity and accuracy
If you’re not flying solo, and have a few employees or offsiders on the payroll, you absolutely need payroll software. The good news? You can simply use the inbuilt payroll functionality in your accounting software.
In Australia, payroll is reported automatically to the government in-software via STP (single touch payroll) which necessitates the use of STP-enabled payroll software. (It’s now mandatory not use software when processing and reporting pay runs.)
The advantage of using the same software for all accounting and payroll needs is that you have it there under one roof. You can easily process a pay run while also understanding your outgoing and incoming cash in the same system.
To see how this all works in the real world, check out how Jason Chivers, from Jaycee Plumbing & Gasfitting uses cloud accounting to run his business…