When you run a contracting business, it can be very tempting to try and just handle all the bookkeeping yourself…
Believe me, I get it!
And maybe this stems from trusting someone in the past, and being burned?
Leaving things a MESS.
Or simply thinking you have to understand every detail?
But whatever the reason, if you want to build a business that is profitable, successful, and gives you and your family the lifestyle that you desire…
Then you need to be ruthless with how you allocate your most important asset.
YOUR TIME.
As a business owner, your time is invaluable because your hourly rate, is the hourly rate of the entire business.
And this means your time needs to be spent on the business owner’s high value tasks.
That is, marketing, sales and LEADERSHIP (and delivery as a one man band).
NOT being bogged down in administration, bookkeeping and accounting!
Because while it’s critical that you have excellent bookkeeping and accounting, it’s even more critical that YOU’RE not doing it.
As a busy contractor, you know how valuable your time is.
If you spend 10 hours a month on bookkeeping, that’s 10 hours of administrative work that could be spent on revenue-generating activities.
That adds up to a lot of hours (and lost revenue) in a year.
Not to mention the fact that 9 times out of 10, you’re not doing things the way they’re SUPPOSED to be done – because you’re not an accountant or bookkeeper!
So, you doing the books yourself, is no different to your customer going, “yeah you know what I think I can move this wall, or I think I could install this new hot water system… I think I could do this on my own and save the money” …
You can’t think this way…
You can’t afford to be short sighted…
A lot of trade business owners don’t believe they’re ‘big enough’ to outsource their bookkeeping, but listen, many of our accounting and bookkeeping clients are one-man bands that couldn’t be happier with their decision!
It simply comes down to understanding where your time is best spent.
You’ll have far greater wins with your business, your cash flow, and your income, if you free yourself up to focus on where your strengths lay.
This is called leverage.
If you want to grow your business, you need to gain as much leverage as you possibly can.
And on the flip side, this isn’t where your talents lay!
In my opinion, a lack of proper bookkeeping practices is one of the biggest silent killers behind every failed contracting business…
Because most contractors never get taught the real importance of it all.
They obviously know it needs to be done, but they typically don’t understand the level of importance it actually has – so it isn’t prioritised.
I’ve had coaching clients without accounting software asking me whether or not they should pay a subscription to a google review company… even though they were stacking reviews every week easily and for free…
And in that situation, I very politely expressed that their priorities need serious adjusting…
So, not prioritising bookkeeping is a big one across the trades…
But if you don’t have up to date bookkeeping.
You can’t track costs, performance against sales targets, your gross profit, tell if you’re pricing is where it needs to be, how your overheads are sitting, if you’re able to afford to buy certain things or bring on new employees, you might overpay taxes…
And this list goes on forever, right?
You need to know what the financial impact of you and your employees’ decisions are in real time, and this stems from excellent bookkeeping…
Not to mention staying compliant, being able to get company and personal loans, staying out of trouble with the ATO and all that other fun stuff…
So, this is why every tradie should never do their own bookkeeping.
It is costing them time, money, opportunity and peace of mind.
If you're an electrician, plumber, painter, carpenter, or any other tradie business owner who is looking for assistance with your tax, accounting, and bookkeeping - click here to learn more!
