201 – Understanding cash flow and reporting

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Part Two – Understanding cash flow and reporting

Series: Tax Essentials for Tradies and Contractors 
Guest: Tab Burkhalter from The Numbers House

Accounting is one of those topics that is hard to make sexy, but when you learn new tricks, it can make an incredible difference to both your business and your personal life. 

When I started my business journey, I never had any advice or counsel from anyone that had a clue about numbers. I had no one in my corner. There were no podcasts, no amazing facebook communities. Even my accountant at the time was an absolute punish to get information out of.

In this series, Tab dives into three essential areas that tradies and contractors need to focus on. Three areas that I wish I had better understood when I started out. Three areas that we could probably all improve on. 

My advice to everyone, especially those starting out in business, is to learn numbers and understand your finance. You don’t need to be an accountant to keep yourself on track and out of danger. 

If you’re interested in numbers and finance topics, you’ll want to listen to these also.

  • Get a grip on your financials – [LINK]
  • Lack of focus on Gross Profit Margin – [LINK]
  • Profitability. Get your financial house in order – [LINK]

About this podcast, ‘Understanding cash flow and reporting

Podcast Highlights:

  • 02:34 – The accrual method of accounting
  • 05:41 – Cashflow supporting expenditure
  • 07:03 – Budgeting
  • 10:38 – Managing tax and overheads
  • 13:34 – The danger of pricing jobs at cost & hoping on variations
  • 19:36 – Charging $250 will barely break even
  • 22:54 – Financing shortfalls on credit cards
  • 26:21 – Reconciliation frequency and habits
  • 30:51 – Banks making money off poor cashflow management
  • 33:53 – The owners’ draw

Stemming on from part one of the ‘Tax Essentials For Tradies & Contractors’ series, titled, ‘Why you need two sets of books’, this episode dived deeper into the importance of understanding how to manage cash flow and how to report on our numbers. 

I know over the last 12 months, I’ve implemented a weekly reporting schedule into my business and we’ve had the best year yet. Is that the only reason? Likely not. However, it’s certainly made it easy for me to see potential problems arise in the early stages.

The two things that were the turning point for my businesses, would certainly be understanding cash flow and regular reporting. I just used to bury my head in the sand and not want to confront reality. Since I changed that, my business has progressively got better and better. 

In this podcast, Tab runs through his methods of managing cash flow and accurate effective reporting. Enjoy. 

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The Site Shed is one of the best online communities and podcasts for tradies out there. The free content provided to members is unbelievable - offering invaluable advice to run a successful business, and the community of tradies is truly awesome. Do yourself a favour and check it out.

Peter Cox Business Man

Great work Matt with all the podcasts and the site shed facebook community group. The amount of information that you can learn for free in this space is unbelieveable. It's great to see like minded contractors and trades trying to improve their businesses and also share ideas and help others. Highly recommend. Thanks!

Ben Hern Business Owner

I have been listening to the pod casts for a few months now, I can't get enough of all the awesome content that you guys provide. Especially when you guys deliver it from a trade perspective which helps out a lot. Keep up the good work and hopefully one day I can afford one of the trade training trips.

Ché Henton Customer

I own a construction company,and i love learning how to make my bussiness more competitive,profitable and how to better serve my clients. The site shed is a wonderful place to get invaluable knowledge no matter your trade .

Michael Mullinax Construction Company Owner

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