Bookkeeping is an important part of any trade business. Keeping accurate records of financial transactions is essential to maintain smooth business operations. In this blog, we'll take a closer look at bookkeeping for trades, and some tips to keep your financial records organised.
Bookkeeping helps Tradie businesses to manage cash flow, track expenses, and make informed financial decisions. By properly recording financial transactions, trades businesses can:
1. Identify areas of high expenditure: By tracking expenses, businesses can identify areas of high expenditure and work to control costs.
2. Track revenue and profit margins: By keeping track of revenue and profit margins, businesses can identify trends and make informed decisions to increase profitability. Do you know what is an ok, good and great profit margin? We do, so we can help identify these for you.
3. Plan for the future: With accurate financial records, businesses can plan for the future, whether it be for expansion or managing risk.
Tips for effective bookkeeping for trades
1. Keep separate accurate records for each project or job: Trades businesses should keep separate records for each project, including expenses and revenue. This will help to track profitability of each project/job and identify areas for improvement.
2. Use technology to simplify bookkeeping: Trades businesses can use bookkeeping software to simplify financial record keeping. These software can help to automate repetitive tasks and make data entry more efficient.
3. Maintain accurate inventory records: Trades businesses should maintain accurate inventory records. By keeping track of inventory, businesses can easily identify stock shortages and restock as necessary and in a timely fashion.
4. Reconcile accounts regularly: Trades businesses should reconcile accounts regularly to ensure accuracy. This involves comparing financial records to bank statements and credit card statements to ensure that all transactions have been accounted for and charged out accordingly.
5. Hire a professional: Finally, trades businesses may benefit from hiring a professional bookkeeper. This can help to ensure accurate record keeping and take the burden off of business owners who may not have the expertise or time to manage bookkeeping on their own.
In conclusion, bookkeeping is essential for any trades business. By properly recording financial transactions, trades businesses can track expenses, revenues, and profit margins, and make informed financial decisions. By following the above tips, trades businesses can simplify bookkeeping processes and maintain accurate financial records.
Contact Leah to find out how we can help you with the above and give you back some previous time.
