Best Accounting Software for Australian Tradies

Accounting software is a fundamental part of running a small business. If you work as an independent contractor, or a “tradie” in Australian terms, you might have some trouble keeping track of your finances and your inventory. A good accounting program will work wonders for your business!

The best accounting software for micro-business owners, independent contractors, and tradies is Xero Accounting Software. Xero Accounting Software helps pay bills, record expenses, track projects, accept payments, pay workers, and more. It also only has a small monthly subscription.

Now that you know that Xero accounting software exists, you may be wondering how much it costs to use and what features they have that will help you run your business. Keep reading to find out all the details.

Micro-Businesses

One of the best ways to make some money and be your own boss is working as the owner of a micro-business. A microbusiness is any business that has between 1 and 9 employees. The most common form of a microbusiness is when someone is working as an independent contractor or as a tradesman.

These businesses might be anything from construction to plumbing to landscaping; if you know a trade (like plumbing, for example), you can pretty easily start your own micro-business. Simply by working on the plumbing systems of people that live nearby, you can make a great living and manage your own business.

Micro-businesses are easy to manage, easy to start, and easy to work for. These businesses usually work on a contract basis to do a specific job, and often charge by the hour (with parts included). As long as you can reliably solve people’s problems with their plumbing, electricity, or anything else, and have the correct licences in place, you can make a living starting a micro-business.

However, such small businesses bring several drawbacks with them. One of these drawbacks is that with so few employees, you probably don’t employ anyone that has a lot of accounting experience. Larger businesses employ several accountants to manage their expenses, ensuring that their paperwork is done by professionals. Micro-businesses usually don’t have such a luxury, and for that reason, they usually turn to accounting software.

Accounting Software

Accounting software is any computer program that helps bookkeepers, accountants, and business owners to handle their company’s finances. In many cases, it helps someone who does not know much about taxes and finances to keep their business accounting records in order.

Accounting software is usually a set of large and comprehensive programs that can help accountants to be more effective and connected as they serve the company that hired them. However, there are a couple of programs that are specifically designed to be used by small business owners or people that have minimal experience in accounting. These programs can be essential to the smooth operation of a business. Having said this, it is recommended that if you don’t have a great deal of accounting knowledge, you engage the services of a bookkeeper to regularly check over your Xero file to ensure accuracy and reliability.

Xero Accounting Software

Xero is a program that was built in New Zealand and it was designed for people who work in micro-businesses. More specifically, it was developed to help a large number of small businesses (including tradies) in Australia and New Zealand to manage their finances easily and effectively. Xero costs a lot less than an accountant would per month and uses very simple and intuitive software to get the job done.

Xero is a cloud-based program that helps you to keep all of your information and transactions with you wherever they go through the mobile app. This app lets you clearly see how your business is doing. You can see how much money you are making and how high your expenses are. You can also more easily input costs and transactions to keep track of how well everything is going.

Paying Bills

One of the features of Xero is the ease that you will have in paying your bills. With some simple setup, you can keep track of which bills you have paid and which bills are coming up soon. You can even schedule specific times for bills to be paid.

Furthermore, by tracking all of the bills that you pay, you can easily see what you are spending the most money on. Keeping information like this is one of the reasons that accounting software is so important for a growing business. Without some way to keep track of where your money is going, you will have a hard time increasing your profit margins.

Claiming Expenses

In addition to watching the bills that you pay, tradies will need to know what they are spending on expenses. Through Xero, you can easily log down your receipts, track how much your employees are spending, and claim expenses straightaway.

Because most tradies charge their customers for a combination of an hourly wage and the cost of the parts they used to fix their sprinkler system (for example), being able to keep track of your expenses is super important. Furthermore, by keeping track of your past expenses, you will be able to give more accurate estimates to your future customers.

Accepting Payments

In addition to offering great tools to help you to manage your finances, Xero is also partnered with several payment companies that will allow you to more easily charge your customers. If you need your payments quickly in order to pay bills, Xero has you covered. They are also securely connected to several banks in order to keep your finances as up-to-date as possible, instead of having your business’s financial information be several days out of date.

Paying Employees

Xero also helps you to pay all of the employees in your business. Whether you pay weekly, fortnightly or monthly, you can pay your employees with just a few buttons.

This software is also partnered with a few other companies that help your employees get paid immediately. With Xero, your employees can also request leave, and you can approve it in one place, which saves you time.

In addition, Xero can calculate employee taxes and other payroll expenses such as super, so you don’t have to spend time doing it yourself. If you’re trying to figure out your payroll, this is a real time-saver! It also means you won’t have to pay someone else to calculate taxes, which saves you even more money.

Manage Employees and Clients

With Xero, you can manage client information and past conversations in one place, so you will never have to go hunting for a customer’s contact information. This will save a lot of time.

You can also manage your employees and jobs with Xero’s Workflow Max product offering. You can create tasks, jobs, invoices, timesheets, and manage the workflow. This will make it easy to assign employees to jobs and ensure that they are getting done in a timely manner.

Inventory Records

When you use Xero, you can keep track of inventory. Xero has partnered with Fishbowl, which helps you manage your business’ inventory. When you use this inventory tracking program, you will ensure that you have enough equipment and supplies to complete a job in a timely manner. You will rarely have to delay a job because you don’t have what is necessary to complete it.

This will cause your business to expand and will make you more money because customers will talk about the great services that you provided in a timely manner, and more people will hire you to complete jobs. If you use Xero, your business will have the potential to scale and expand. If you are self-employed, you will have greater control over jobs because of how Xero allows you to view and control your inventory.

Tracking Progress

For tradies that work on bigger projects, like construction or landscaping, Xero Workflow Max can also help you to track your progress on certain projects. Not only will you and your employees know where you stand on your different contracts, but you are also able to set goals and make plans for when you will finish each aspect of a project. Having this information at your fingertips will help you to better interact with your customers and it will keep you and your employees on the same page.

It will also help you know how many projects are under your control at a time and how long it will take to complete them. Since you will better understand how long it will take for all of your current projects to be completed, you will be able to understand when your employees are available to start new projects and communicate that to the customers.

Workflow Max is a separate product offering by Xero and requires a separate subscription in addition to the Xero accounting software subscription. Xero accounting subscription costs are discussed later in this article.

Business Training

Xero doesn’t just help your business by keeping track of your money; it also includes subscription access to guidebooks on how to start your business, how to grow your business, and dozens of other topics. There is a lot of important information about good business management that accountants and entrepreneurs learn while getting their degrees. But with Xero, you can have access to all of that information without any need for a degree. By practicing just a few strategies, your business can accelerate the rate of its growth.

Accounting

Xero helps you keep track of your accounting if you do all of your business’ accounting yourself, but it also helps your accountant keep track of your business’ records and reduce the amount of time they spend working on your business’ finances.

Your accountant and bookkeeper can link your Xero account with their Xero Practice Manager subscription, so when BAS time or tax season, your bookkeepers and tax accountants workload is reduced so you can relax. You can also connect your ServiceM8 or Tradify to your Xero account so when you are creating invoices and doing other accounting tasks, it is easy. Overall, Xero will make your job and your accountant’s job much easier than it was in the past.

Cost of Xero

Unfortunately, Xero is not free to use. However, you can try out Xero during a 30-day free trial so you can decide whether or not this is the best program to use for your business or trade. If you do like using the program, keep reading to find out how much each plan costs and what features they include.

If you have less than 10 employees, Xero Accounting has 4 different plans that you can choose from, and they each have different features available. The plans and their features are:

Starter Plan: $27 per month

• Send quotes
• Create and send 20 invoices
• Enter 5 bills into program
• Reconcile bank transactions
• Do payroll for 1 person
• Capture bills and receipts using Hubdoc
• See short-term cash flow
• Create business snapshot

The Starter Plan is typically best for tradies, people who are self-employed, and new businesses that are just starting out and beginning to grow.

Standard Plan: $54 per month

• Send unlimited amount of invoices
• Send unlimited amount of quotes
• Enter unlimited amount of bills into program
• Reconcile bank transactions
• Do payroll for 2 people
• Capture bills and receipts by using Hubdoc
• Bulk reconcile transactions
• See short-term cash flow
• Create business snapshot

Xero’s Standard plan is typically best for businesses that are growing quickly. So, if your business is starting to grow larger, take a look and see if this plan for the Xero program works for you.

Premium 5 Plan: $70 per month

• Send unlimited amount of invoices
• Send unlimited number of quotes
• Enter unlimited amount of bills
• Reconcile bank transactions
• Do payroll for up to 5 people
• Capture bills and receipts using Hubdoc
• Bulk reconcile transactions
• Use multiple currencies
• Automate superannuation
• See short-term cash flow
• Create business snapshot

The Premium 5 plan is great for large businesses that sell to multiple countries, especially because it allows people to pay in multiple currencies. This means you can do business anywhere in the world and travel for work, which is always fun.

Payroll Only Plan: $10 per month

• Create and do payroll for up to 4 employees

Although the Payroll Plan is severely limited, especially when compared to all of Xero’s other plans, it works and is meant to help you with one time-consuming thing: payroll. Because of this, it doesn’t need to be fancy or have many features included. This plan is especially helpful in keeping employers compliant for Single Touch Payroll.

If you have 6 or more employees, you then move up to Xeros Ultimate Plans, which commence at $110 per month and go up to $390 per month for up to 200 employees. We would generally recommend though, that if your payroll reaches about 50 employees, a specialised payroll program that integrates with Xero such as KeyPay or Deputy may be a more practical solution.

If any of Xero’s plans don’t include enough features for you to run your business fully, there are features that you can add to your current plan for various monthly fees. Unfortunately, the fees vary depending on the add-on.

These optional add-ons allow you to:

• Claim expenses: Free for 2 months to 31st September 2022
• Track projects: Free for 2 months to 31st September 2022
• Analytics Plus: $10 per month

To see the prices after the free period, checkout the offer terms at Xero’s pricing plans page.

Overall, Xero Accounting is a great program that will help you run and expand your business and keep track of your jobs when you are self-employed or a tradie.