Tax time is not easy and many tradies feel the stress of this busy time. The complexity of the government stimulus packages and support and changing legislation for the pandemic may cause more headaches than usual. To assist you, we encourage you to take this time to understand a detailed picture of your business and practice healthy financial habits that can save you from repeating mistakes in the future.
Firstly, make record-keeping regular. It takes discipline to stay on top of your books but if you keep putting record-keeping on the back burner, it’ll be painful for you to tackle the building receipts and invoices. Have the right process in place to avoid mistakes. Set aside a short period of time every day for bookkeeping or outsource your bookkeeping to someone who can handle it better.
You should also understand your business performance. Unpaid debts can be one of the biggest problems your trade business will face. These debts can be in the thousands every year. Bad debts can be part and parcel of a running trade business but you can actually predict if a customer would pay or not. Avoid taking jobs that won’t get paid. Look for common traits of bad debtors, know your numbers, and look at the areas of your business that affect your profit the most.
Another good habit is to review debts, inventory and assets regularly. Make sure your bad debts are not included in your total assets and total revenue calculation. Don’t pay tax on a debt that’s unlikely to be paid. Get rid of obsolete stock and assets that no longer generate revenue.
Every time you file your GST, you can understand your business performance a little more. This tax is a good estimator of your net profit. There are online calculations for you to try but you can just get an accountant or bookkeeper to do it for you every tax cycle. Make a voluntary payment often so your final tax bill will be small and completely manageable. You can put any refund to your next tax bill. Make paying tax a priority in the business.
Put an invoicing and cash collection system in place. Invoicing is very important in that a business won’t make money without it! Can your business send invoices every day? Are you using systems and processes that will support this?
Have a bookkeeper to manager your tax, invoicing and bookkeeping to avoid problems in the future.
As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.
You can click here to speak to a business, accounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.
We would love to help you formulate investment strategies and streamline your processes to take your business to the next level. Our goal is to help you grow your business, find ways to invest more and increase your productivity.
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437