For many small trades businesses, the end-of-financial-year (EOFY) tax return process can be a nightmare. Pushing paperwork aside for “later” often results in a frantic scramble as the EOFY approaches. This habit of postponing tasks is common among tradies—but it needs to change.
Research from Fergus shows that many tradies are still stuck in the dark ages. Nearly half (49 percent) haven’t adopted job management software, and a significant 43 percent still rely on manual paperwork and spreadsheets. This stubborn attachment to outdated methods is why tradies find themselves in a bind during tax season. Clinging to these inefficient practices makes tax preparation far more painful and time-consuming than it needs to be.
7 Strategies for Tradie Businesses
- Job Management Software: Ditch paperwork! Track jobs, invoices, and expenses for easy tax reporting. (e.g., Fergus, Tradify, ServiceM8)
- Regular Bookkeeping: Stay organized by updating financials weekly to avoid last-minute chaos. (e.g., QuickBooks, Xero, MYOB)
- Hire a Tax Pro: Find an accountant familiar with tradie needs for expert advice and compliance.
- Digitize Records: Go paperless! Scan receipts and invoices for easy access. (e.g., Google Drive, Dropbox, accounting software storage)
- Set Goals & Budgets: Plan for success by establishing clear financial goals and tracking performance.
- Automate Payments: Streamline cash flow with automated invoicing and payment systems. (e.g., Stripe, Square, PayPal)
- Educate Staff: Train your team on financial software to ensure accuracy and efficiency.
Dan Pollard, founder of Fergus, said, “Tradie business owners can avoid late nights and stressful searches for lost paperwork by embracing technology, like job management software, before the new financial year kicks off. Job management platforms can do a lot of the heavy lifting and make tax time much less stressful by ensuring transactions are systematically recorded and organized from the start. This can save tradies their sanity and streamline the EOFY process.”
With July 1 just around the corner and new incentives announced from the 2024-25 Federal Budget, now is the perfect time to embrace the latest technology and avoid the EOFY scramble. The Federal Budget has introduced initiatives to support small businesses, including a $10.8 million investment in mental health programs for small business owners, direct energy bill relief, an extension of the $20,000 instant asset write-off, and $290 million in cash flow support. There’s no excuse not to take advantage of these benefits and make the annual tax return scramble a thing of the past.
Ditch the paperwork nightmare
Paperwork is a bloody nightmare, especially when it piles up. But with job management software, you can kiss those headaches goodbye. Forget those boxes marked “receipts” and “invoices.” This software tracks everything—your quotes, invoices, and supplier invoices. Come EOFY, there’s no need to scramble through filing cabinets or the truck’s glove box. All the documents and transaction records needed will be neatly organised and easily accessible online.
Get your finances in order
Keeping track of finances is crucial, and it’s even better when it’s hassle-free. The integration between job management software and accounting systems like Xero means your financial data is always up to date. When an invoice is updated in the software, it instantly reflects in Xero, providing a clear, real-time view of the business’s financial standing. This feature offers quick access to vital financial summaries, from what’s owed to the details of all invoices. It’s about ensuring you have a complete and clear picture of your business finances, without the extra legwork.
Track every job down to the last detail
Ignoring your finances makes tax time harder than it needs to be. Understanding the importance of real-time updates when an invoice is modified in the job management software is how to set yourself up for success. This feature delivers instant access to critical financial summaries, from outstanding balances to detailed invoice information.
Dan Pollard said, “EOFY doesn’t have to be a nightmare if everything’s set up right. Don’t get caught in the next EOFY rush. Moving to a digital management platform, and even better if it’s one designed for tradies, not only means ditching the box of paperwork, but it also simplifies the process of storing key information for tax returns. “But the key is to get your business organised before July 1 so when the next EOFY happens you’re entirely ready to go.”
Disclaimer: Fergus or Dynamic Business does not provide tax, legal or accounting advice. This article has been prepared for informational purposes only and is not intended to be relied on for tax, legal or accounting purposes. You are strongly encouraged to consult your own tax, legal and accounting advisors to determine how the information may relate to you or the specifics of your business.
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