Accounting for Electricians
As you know, running a business as a domestic or commercial electrician can be challenging. Apart from the working conditions and physical
demands of the job you also need to contend with long hours, emergency call outs, extensive travel, heavy regulation and ongoing training
While clients expect you to rewire their homes, crawl into confined spaces, install power points, down lights and new electrical appliances – bookkeeping and administration often don’t get the attention they deserve. While GST, BAS and tax payments often represent some of the largest financial obligations for a self employed electrician, many end up paying too much tax and incur fines for non-compliance.
Here at SBG Accountants we understand electricians and having an accountant who understands the mechanics of running an electrical business can mean the difference between just surviving and potentially thriving. Over the past decade, Paul Dobson and his team of accountants have mentored dozens of electricians through the various stages of their business life cycle – from start up right through to sale. Apart from the usual small business compliance issues of GST, BAS, PAYG and superannuation, we assist electricians with managing their cash flow and selecting the right software to prepare quotes, invoices and manage their payroll and sub-contractors. We offer you experience, technical tax knowledge and most importantly, an intimate understanding of your trade.
Trades people including electricians are one of our specialist client groups and we are recognised as business start-up specialists. If you are looking to start an electrical business or buy an existing operation, there are numerous issues to consider including your business structure, tax registrations, insurances, tools, software, your vehicle plus finance. As business advisors we can assist you in all of these areas plus provide advice on HR matters, payroll and the preparation of a business plan.
Over the past two decades our team of accountants have helped dozens of trades people get their business off to a flying start. We offer you experience, technical tax knowledge and most importantly, an intimate understanding of the building trades.
Starting a business is a bit like building a house and you need solid foundations. In a business sense these include the right tax structure, accounting software, insurances, a marketing plan, website and social media channels. Your choice of business structure is critical and there are a number of different options including sole trader, company, partnership or trust. When it comes to selecting the most appropriate tax structure for your business we always recommend you ‘start with the end in mind because Australian tax laws are complex and changing your business structure at some point in the future can trigger a capital gains tax event that could prove costly. Whenever we provide advice on business structures we always take into account issues like:
- Minimisation of Income Tax
- Maximize Asset Protection
- Allow for the admission of New Business Partners or Investors
- Comply with all Legal Requirements in your Industry
- Consider Future entitlement to Discount Capital Gains Tax Concessions
- Risk Profile of Your Industry (and trades are high
As a consequence, we often find the business structure is a compromise based on the relative importance of each of these issues.
Your choice of accounting software is another brick in your business foundations and up to date, accurate financial records let you to make informed business decisions. The wrong choice of software can be catastrophic and poor business records are one of the biggest causes of business failure. You need to match your business needs with your level of accounting skill otherwise you could end up producing ‘computerised shoebox’ records that cause frustration and extra fees which conflicts with our mission of helping you slash the cost of bookkeeping and compliance. Here at SBG Accountants, we want to be your accountant and business advisor, not an expensive bookkeeper. You’ll find we support a range of software options but do have a preference for cloud based solutions like Xero.
To build a house you also need the right tools and when 'constructing' your business we have developed a number of tools including a start-up
broken down into various categories including:
- tools and equipment
- professional advice and software
- information technology costs
- marketing and signage
- vehicle and trailer costs
This checklist will help you identify all your potential establishment costs and these figures then filter through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into our business plan template that will help you secure funding from external sources like a bank.
Our business start up checklist is another useful tool. For a carpenter, your van or utility is arguably your most important business tool and you can download our Motor Vehicle Tax Guide from the resources section of our website to learn more about the alternative methods of claiming your vehicle expenses and the distinction between a business and private trip for tradesmen. In addition, through our affiliate partners we can also assist with vehicle finance (chattel mortgage, CHP or lease) and get you fleet pricing on your new car, ute or light commercial van that could save you thousands of dollars.
Through another affiliate partner we can also help you source funds to finance your business purchase, equipment or franchise fee (if applicable). Pricing is absolutely vital to the success of your business and we can help you do some price modelling plus we use benchmarks to compare your business performance against your peers so you know what is working in your business and what needs working on. If you're starting a business you don't need to reinvent the wheel as we have all the tools and resources to help you get off to a flying start.
MARKETING YOUR BUSINESS
For small business owners, your marketing can be the difference between gloom, doom and boom.
Most trades people rely on their reputation and referrals to grow their business and while these ingredients remain important, you need to shift your marketing focus online. Increasingly local searches like ‘Electrician North Melbourne’ are driving traffic to your website and often your website is the first touch point with a potential new customer. As you know, you only get one chance to make a good first impression and your website is your 'online shopfront' and silent sales person working 24/7 to promote your business.
One of our biggest points of difference compared to other accounting firms is our marketing expertise. We can assist you with your branding (business name, logo and slogan), your corporate brochure and help you harness the power of social media to win more referrals. Over the past few years we have worked with dozens of tradie clients to help them create affordable, quality lead generation websites that are responsive to smart phones and tablets. We can provide advice and guidance with your website content including video production and if your website lacks calls to action or lead magnets we'll help you build them. In addition, we'll introduce you to strategies like re-marketing and search engine optimization to drive more traffic to your website.
If you aren’t using some of these marketing techniques your business probably won't reach its full profit potential.
The marketing process begins with your branding and we have worked through the process with dozens of clients over the years and using some online resources we can help you build a modern brand that resonates with your target market. We can even help you develop your stationery at a fraction of the cost of engaging a graphic artist or marketing consultant.
It's important that you understand the Four Ways to Grow A Business so you know the key profit drivers in your business. We can walk you through a number of profit improvement strategies and even quantify the profit improvement potential in your business. Our role is to make sure you don't leave any profit on the table and if you're an electrician we offer you a range of accounting, taxation and business coaching services including:
- Start-Up Business Advice for Electricians & Sub-Contractors
- Advice regarding the Purchase or Sale of your Electrical Business
- Tools including the Start-Up Expense Checklist and Templates for a Business Plan, Cash Flow Budget, Letterhead and Business Card
- Advice and Assistance with the Establishment of Your Business Structure
- Tax Registrations including ABN, TFN, GST, WorkCover etc.
- Preparation of Business Plans, Cash Flow Forecasts and Profit Projections
- Accounting Software Selection and Training – Bookkeeping, Invoicing, Quotes & Payroll
- Preparation and Analysis of Financial Statements
- Preparation of Finance Applications
- Bookkeeping and Payroll Services
- Income Tax Returns and Tax Planning Strategies
- Assistance with your Marketing and Website Development
- Wealth Creation Strategies and Financial Planning Services
- Industry Benchmarking and KPI Management
- Vehicle & Equipment Finance (Chattel Mortgage & Lease)
- Monitoring and Controlling Labour and Sub-Contractor Costs
- Advice & Assistance with Pricing your Services and Claiming Motor Vehicle Expenses
- Recession Survival Strategies
- Advice regarding Employee Relations and Workplace Laws
- Business & Risk Insurances (Income Protection, Life Insurance etc.)
- Business Succession Planning
We are so much more than just tax Accountants. We are business and profit builders who genuinely care about the success of your electrical business. We service the needs of a number of electricians and other trades and offer you strategies to grow your business, your profits and your wealth. Over the past decade electricians have become a real niche within our accounting practice and if you’re looking to get your electrical business off to a flying start or want to grow your existing business, contact us today.
We invite you to book a FREE, one hour introductory consultation to discuss your business needs. You can expect practical business, tax, marketing and financial advice that could have a significant impact on your bottom line. To book a time, call us today on (03) 9629 6744 or complete your details in the box at the top of this page. Let's get to work ON your business so it is more profitable, valuable and saleable.
SBG Accountants & Business Advisors - Taking Care of Business