The #1 Way To Keep On Top Of Your Finances as a Trade Business Owner
We’ve said it before and we’ll say it again – a lack of understanding about your business’s financial situation can be fatal to your financial success.
Like the taking a human pulse shows that a human is alive, being able to view and diagnose the vital reports of your business in an instant will provide clarity around the question ‘is the business doing ok or is it in financial difficulty?’. Your financial reports are the pulse of your business.
Without this immediate information how do you prescribe a solution? How does a trade business owner prevent falling into the common trap of being ‘in the dark’ when it comes to their business’s numbers?
With “time consuming”, “clunky”, “boring” and “confusing” as just some of the words we hear tradies use to describe the undesirability of looking at financial figures, it’s no surprise that the massive benefits of doing so (i.e. success, growth and profit!) are often overlooked.
What many trade business owners don’t know is this – the introduction of cloud accounting applications to an increasingly sophisticated realm of technology has meant that keeping on top of your business’s finances is simply not that hard!
In fact, at a recent Xero conference they shared new research. The research claims that 88% of businesses that adopted cloud accounting succeed, compared to a 38% success rate for businesses that don’t. In short, the message is clear: adopting a cloud accounting solution will provide you with a far greater opportunity to succeed in business.
Instead of throwing more statistics at you, allow me to explain the key benefits of cloud accounting. This way, you can understand just how big of an impact it will have on the way you conduct and understand your business’s finances.
To use your cloud accounting application all you need is a device, the application itself and the Internet. The simplicity of this means it’s easily accessible and oh-so convenient. Gone are the days of driving to the bookkeeper to drop off shoeboxes filled with scrunched up receipts (you know what I’m talking about!). Meetings with your accountant can be conducted on-line whilst simultaneously looking at the same up-to-date data, and you don’t even have to be in the office.
With cloud accounting you can look into your finances at any given moment simply by accessing the application. This means immediate access whilst on the road in between customers, waiting in the queue at the local coffee shop or as one of our members jokingly claimed after adopting a cloud accounting solution, “Now I can reconcile in traffic!”. The ability to get an immediate update and/or take action on your accounting around all your other activities allows you to be efficient and hence gives you back time!
The one major benefit of cloud accounting is real data in real time. Both you and any other person with access to your cloud accounting application (such as your bookkeeper or accountant) can make changes, and these changes can be seen immediately.
The ability to regularly update your finances, and gain instant visibility of changes means that it’s less likely that you’ll fall behind. When working with an accountant, this also provides peace of mind, as you are just as much on top of your finances as your accountant is.
A consideration, of course, is to ensure the cloud accounting platform is compatible with your job management system. The efficiency of the connectivity between the two, will result in a far more streamlined job flow, and hence provide even more clarity around real data in real time. The immediate positive effect on the business will be obvious.
With cloud accounting, you can say bye-bye to tripping over your words in complex and confusing conversations with your accountant. If you have queries, getting them solved is as simple as logging into your cloud accounting application at the same time as your accountant and showing them what you are talking about. Doing this eliminates the headaches and frustration of trying to explain what you mean, prevents misunderstanding and misinterpretations of what you are saying and promotes clarity and resolution regarding your query.
As mentioned earlier, your finances are the key indicators of your business’s health. That said, seeing real data in real time is the fundamental benefit to REALLY understanding where you stand. Not last quarter or last month, but today.
Quite simply, how can business decisions be made unless you first consult your business’s health? We discuss what reports are critical to understand as a savvy business owner at ‘The Future Tradie’ live events.
But to compliment this understanding, adopt cloud accounting today and see the difference it makes to the way you handle your finances.
- Join our Kick-Ass Tradies Facebook Group, for access to trade business specific conversations, tips and resources, plus a like-minded community of tradies.
- Book a 15-minute Game Plan Call with Andy, owner of Dr. DRiP plumbing and co-founder of Lifestyle Tradie, to clarify your priorities and get clear action steps.