One of the simplest but most powerful combination of software tools we find for our smaller trade clients is a combination of ServiceM8 (Job Management), Xero (Accounting/Bookkeeping + Payroll) and Receipt Bank (Receipt/Invoice processing).
Unfortunately, Tradies are notorious for being less than perfect when it comes to keeping their books in good order. But when you’re a one or two person operation, it’s hard to justify the cost of outsourcing your books. So here’s a few tips for all our tradie friends to help them keep their books clean & tidy!
1) If it’s business related then pay for it from a business bank account.
Every. Single. Time. Transfer funds from your personal account into the business if you need to. If it’s not business related, pay for it from your personal account. Try not to use cash if possible.
2) Don’t submit things to Receipt Bank twice.
For example if you’re purchasing something on account and they give you a paper invoice at your supplier but you know they are also going to email it to you; don’t take a photo. Setup an auto-forwarding rule in your email that will automatically pass those invoices on to Receipt Bank.
3) Know the difference between a tax invoice/receipt and an EFTPOS receipt.
It sounds simple enough but so many people get it wrong. Tax invoices/receipts are what you need to claim a tax deduction. EFTPOS receipts won’t satisfy the ATO’s requirements.
4) Receipt Bank will hint to you that there is a matching transaction in Xero.
If there’s a match, it likely means the item has been paid for from a business account and will reconcile nicely once published to Xero. If there’ isn’t a match – see point 1!
5) Reconcile your customer payments from the bank feed against the matching sales invoice.
Payments will be automatically synced back in to ServiceM8.