Tips from an Accountant for Builders to Run a Profitable Construction Business.
It’s an industry in flux, interest rates are a wild ride, housing prices are up and down, & the cost of supplies & wages are another matter entirely.
Running your own business in the building industry comes with it’s own unique set of risks and challenges.
Here is what an accountant for builders wants you to know.
Keep your pricing up to date with your costs.
Quoting up your work is a critical part of the job - don’t rush it.
A “gut feel” strategy won’t cut it with your pricing. A wholistic approach to quoting up a job is something that can make or break your business.
Your instincts are great, and your on the job math skills are likely a lot higher than a professional accountant, but there’s a lot to consider in a pricing strategy.
Mates rates get a no from this Newcastle tax accountant (as a general rule). Make sure your pricing strategy considers the risks and rewards that are associated with owning a business - otherwise you may as well go and work for someone else, and save your own behind some trouble.
We cut the crap with our friends in the trade industry and walk the delicate tight rope of cost and reward by keeping the communication lines open, without the accounting jargon and unrealistic expectations.
Take photos of your receipts and stay on top of your bookkeeping.
Your time is precious and in a labour intense industry, you don’t need to lose sleep over how your business is performing. You don’t have to be a bookkeeping wizard or force your partner to work harder than they need to in order to keep the wheels moving.
Doing your bookkeeping yourself is simple with the likes of Hubdoc and Xero - you can snap a photo while you’re still outside Bunnings and lose that receipt faster than you can say sausage sandwich. The reconciling in xero can happen without the worry of lost receipts, when you’re ready - though don’t let it get away from you.
Outsourcing your bookkeeping is a great way to make sure it stays in check. You don’t have to be a wizard with reporting, BAS and financial statements - we can handle that and deliver meaningful reports that will keep your business trending in the right direction, and steer you clear of any sneaky losses that can and easily do creep up on you.
Track the time spent and materials used on every job you do.
You quote a job and then you go do it.
What we BEG you to do when you finish the job, is to take a look at how much time you actually spent doing it, and see how much money you actually spent on it, when it comes to wages and materials.
Track your time - there’s a stack of software options you can use to track your time to make sure it doesn’t get away from you. Choose an option that integrates with Xero and the reporting and numbers will be something you can easily monitor - we’ve thrown a couple of options together for you HERE, HERE & HERE.
If you do come up at a loss, that’s ok - it happens. But you do need to be coming up with strategies to make sure the numbers don’t get away from you in future.
No one wants to lose money while they’re trying to make a profit - we can help.
Make sure you’re talking to your accountant, honestly.
We go into a whole lot more depth HERE, about why reducing your tax payments may do your business more harm than good.
Your accountant only knows what they can see in the numbers, and what you tell them. If you reduce your tax payments and spend every cent in your business, sure, you won’t have to pay much tax, but that home loan you may have wanted to take out next year, could be out of reach if your profits aren’t sitting where they need to be on paper.
Bottom line, make sure you’re working with an accountant you like.
One of the most significant benefits of working with a professional accountant is the tailored and targeted solutions.
If you want to maximise what you get out of your accountant, you need to feel like you can talk to them about what’s really going on. We take the time to understand your unique needs and goals, crafting strategies that align with your vision for your personal life and business.
Only you can define what success looks like for you and your business, and we’re serious about taking your goals seriously.
Whether it’s tax planning, budgeting, running a self managed super fund or financial forecasting, we make sure to offer personalised support and guidance every step of the way.
Ultimately, it is our goal to empower you to take control of your finances so you can make informed decisions to pursue your business goals with clarity and purpose.
If you’re a tradie struggling to navigate the financial aspect of your business, you’re not alone. Outsourcing your accounting tasks to a professional can be a game-changer. An expert can transform your approach to finances and empower you to take control of your business’s financial health. Don’t let the numbers keep you from the goals you set out to achieve and the life you want to build.
We’re passionate about empowering business owners in the trades and construction space to make confident & informed money decisions.
