When running a trade business, should you use an accountant who specialises in the trades?

Any old accountant will be able to look after you as a tradie, but there are benefits to using one who specialises in your industry.

It’s no different to why tradies love using Trade Risk for their insurance.  Sure, you could use any other insurance broker, but our difference is our expert knowledge and experience in your field.

In this guide we’ll take a closer look at the pros and cons of using a specialist tradie accountant, how they can help your business and how to choose the right one for you.

The topics we’ll be covering include the following:

  • Why even use an accountant?
  • Why use a specialist tradie accountant?
  • How can an accountant help my business?
  • Local or online?
  • Do I need an accountant if I use Xero?
  • Choosing an accountant

Why Even use an Accountant?

If you’re a sole trader, you might be asking why you even need an accountant.

For trade businesses setup as a Pty Ltd company, you’ll know that you have to lodge your returns via a registered tax accountant, but for a sole trader you still have the option of doing it yourself.

If you are considering the DIY option, think of it the same as someone doing their own DIY building work at the home.  Many people do it perfectly well, but some completely mess it up!

A good accountant can do a lot of good for your business, so even if you’re a sole trader, it’s at least worth having a chat with a few accountants to see if they can help you.

Why use a Specialist Tradie Accountant?

There absolutely no reason why any suburban accountant couldn’t help out the average trade business owner with their tax.

However that accountant will be dealing with all sorts of people, from private individuals to other small and medium sized businesses.  This gives them a wide breadth of experience, but no real specialisation.

It’s very similar to how we operate on the insurance side at Trade Risk.  Any other broker could assist our clients, but because we specialise in the trades, we have built up specialist knowledge very specific to trades.

We can answer our clients’ questions and solve their problems much more quickly, as we’ve probably dealt with something similar from another business in the same industry.

By using an accountant (and/or bookkeeper) who specialises in the trades, you can benefit in the same way from their more specific experience and knowledge of how a trades business operates.

How can an Accountant Help my Business?

A good accountant will do a lot more than simply lodge your tax returns each year.

For starters they can advise you on the best structure for your trade business.  They might find that you’re better off structuring as a company or via a trust.  This could save you tax dollars or assist with asset protection.

As well as advising on the best structure, they can also have the structure put in place for you and setup properly.  There are options for taking the DIY path on company setups, but again, DIY can be a risk unless you really know what you’re doing.

Some tradies are great at monitoring their cashflow and the health of their business, but for others it can be a weak point as their focus is more on winning jobs and/or being on the tools.

A proactive accountant can keep an eye on these things for you, helping you to identify any cashflow issues within your business and plan how to fix such issues.

Your accountant can also keep you more accountable in various areas, such as lodging your BAS, paying your tax instalments etc.  It’s far better for your accountant to follow you up for these rather than the ATO!

Local or Online?

One of the big decisions to make when choosing an accountant for your trade business is whether you want to use a local firm or not.

In the old days you would always go for a local firm, as you’d be visiting them at least once a year to drop off your box full of receipts.

These days, especially with cloud-based accounting systems such as Xero, having a local accountant isn’t such a big deal.

It’s similar to how people choose Trade Risk for their insurance needs.  In the old days you would use a local insurance broker you could visit, but today tradies can deal with us from anywhere in Australia via phone, email and our online system.

And the results show that tradies love being able to deal with us electronically, and we were even awarded ‘Best Customer Service’ at the Insurance Business Awards, despite the fact that we never see 99% of our clients!

Tradies Accountant Office

It’s no different on the accounting side.  Technology now means you can access a national tradie specialist accountant rather than being restricted to your local options.

If you are someone who does prefer to meet your accountant in person, or you still operate a very paper-heavy business, then you might be better off sticking with a local.

But if you’re comfortable dealing via phone and email, and you’re more comfortable with using technology for your accounting and bookkeeping, then using a local is no longer an issue.

Do I need an Accountant or Bookkeeper if I use Xero?

First up, how good is Xero?  If you’re not using Xero (or any other cloud-based accounting system) in your trade business, you should check it out!

Here at Trade Risk we use Xero to manage all of our accounting and payroll needs, and we just love it.

Given how powerful Xero is, a tradie could be forgiven for asking why they’d need an accountant – or bookkeeper – if they’re using it.

First up, if you’re a company you have no choice, so that’s an easy one.  If you’re a sole trader, Xero certainly makes it easier to manage things on your own.

Whilst Xero is an awesome tool, it still relies on the data that you feed into it.  An accountant or bookkeeper can help manage this process to ensure you’re getting the best out of the system.

You certainly shouldn’t look at Xero (or MYOB, etc) as a replacement for an accountant.

Choosing an Accountant

We’ve already covered off a few areas which should help you here.  Factors such as whether you should use a tradie specialist accountant or a normal accountant, and whether you should use a local or an online option.

Other than that, one of the major factors is cost.  Of course cost isn’t always the best way of judging something, but no one likes to spend more money than they have to.

Above all it’s important to choose an accountant that you’re comfortable with, and one that really cares about helping you and your business.

It shouldn’t really matter if the accountant is down the road or over the other side of the country.  If you feel comfortable with them and the cost is competitive, they’re worth a shot.

And anyway, if you’re ever not happy you can always switch accountant next year until you find the right one to build a long-term partnership with.

Tradie Accountants