Why you need to keep two sets of books

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Part One – Why you need to keep two sets of books

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, ‘Why you need to keep two sets of books

Podcast Highlights:

  • 07:23 – Low income for the government, high income for debt servicing
  • 09:51 – Example-Spending $60,000 on a truck
  • 11:15 – Asset depreciation
  • 14:04 – How to structure your chart of accounts
  • 18:15 – Laying critical foundations
  • 20:45 – Being prepared for your accountant
  • 23:12 – Keeping your books black and white reduces friction

This podcast is really about simplification. If you have simple and easy to follow financials, it will help you, help your accountant and if you ever get audited, help the government understand what has been going on. 

When accounting is not your ‘first language’, it’s easy to set things up the way that you think is correct, but in reality, is far from it. Trust me, I’ve been there.

Taking the time to correctly structure your chart of accounts, amongst a few other key things, really will help you alleviate future speed bumps. In fact, it’s one of the first things our friends over at tradiematepro do with the business accelerator program. If you need a framework to help you in the right direction, go check it out. 

Anyway, I hope you can apply something practical from this podcast. I know I have. 

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