Are you a tradie that has bookkeeping requirements?
Are you a sole trader, Company or Trust?
Bookkeeping for a tradie can be difficult, complex, and confusing if you don’t know what you’re doing.
Where do you start? do you need to register for GST? I have an employee what do I need to do?
In this blog I will go through from start to finish exploring the bookkeeping requirements for a trade business.
This includes most trades that deal with construction for example:
Plumbers
Electricians
Carpenters
Cabinet makers
Roofers
Builders
and everything else between and around.
Where to Start?
Accounting Package
First of all you will have transactions that you have made throughout the month, expenses and also receipts coming in but where to put them all?
Your best bet would be to start with an accounting package, either MYOB , Xero, or quickbooks online depending on your budget and your requirements.
Once you have signed up to an accounting package you will need to activate the bank feeds which will allow your transactions to flow into your accounting package straight from your bank for easy allocation.
If you feel as though your skills aren’t good enough to continue after this point it would be best to contact a BAS agent or use our services at https://clientsneeds.com.au/
Are you confident you can handle Bookkeeping for a tradie? If not keep reading.
Paying suppliers
Let’s start with the expenses, so lets say you went to bunnings and you purchased some materials, you would code this in your accounting package as an expense eg materials expense this will allow you to see how much money you have paid in materials each month.
GST
Hang on a minute what about the GST section, well if you earn over $75,000 in turnover which is money coming into the account only, then you will need to register for GST. Calling the ATO would be the best bet to get this underway, then when coding the materials expense in you would also use the GST code to make sure the GST on this payment has been recorded.
Lodging BAS Statements usually happens quarterly, but it can also be monthly on the 21st of each month.
Receipts & Invoicing
Now for the income side of things, how do I make money? what do I send my customers so they pay me? I would start with a word template and start sending off tax invoices with all your details eg ABN, contact details, company name, bank details, date, due date. If you have all these details listed correctly there should be no reason why you won’t get paid for your services.
But what if you have so many invoices out there that you can’t keep track of them? I would suggest moving this over to the accounting system, through here you will record the invoices, mark off the payments against them, and print off a report showing you exactly who owes you money and how overdue they are.
If you’re a subby you may just use the word version as you may only have 1 customer and it might be easy to keep track of, but when you are a contractor and you have 30-40 customers trying to figure out who owes you can be a nightmare.
Assets & Liabilities
If you purchased something of greater value that is an Asset to your business this would be coded under a Fixed Asset account eg MV At Cost, which then allows the Accountant to see this on the balance sheet for end of year depreciation.
Loans eg Car loan would go in as a liability so you can see how much money you are left owing on the vehicle.
Employees
I have hired an employee what do I do now? Well you need to enter their TFN Declaration and contact details into the accounting system , you will need to make sure you have put in the correct pay rate and hours worked each week using the correct pay items.
Most employees will accrue super so make sure this is ticked , unless they are under 18 and work less than 30 hours a week then they don’t get this. Make sure to check if they are full time or casual as the leave requirements will change, Lastly don’t forget to lodge the STP this is a legal requirement that needs to happen on every payslip, you need to report the payslip figures to the ATO using single touch payroll.
TPAR – Taxable Payments Annual Reporting
Every year all trades part of construction need to report their contractor payments to the ATO, this can be tricky and annoying as you need to make sure you have all the correct details and payments listed to be able to export to the ATO.
Super
Super must be paid on a quarterly basis, all super accrued throughout this quarter will need to be paid by the 28th day after this quarter has ended, if this is not done you will need to lodge a super guarantee statement.
Workcover
If your not insured and your employees are injured on site this can cost you quite a bit, so make sure you are covered by workcover insurance, you will also need to report yearly workcover annual declarations advising workcover on your annual wage payments.
As you can see there is quite a lot involved in the bookkeeping side of things so if your unable to do this bookkeeping for a tradie work yourself it would be best to contact a BAS Agent or use us at https://clientsneeds.com.au/contact-us/
