“The root of all evil in the industry is chronic non-payment for jobs” according to the Australian Subcontractors Association in a recent article in the Fairfax papers. Nothing new maybe, but cash flow is something that’s on everyone’s mind at the best of times. Non-payment is maybe the worst case, but it’s not just that, what about late payment?
“We’ve come out of a period where there has been so much work around. Good systems didn’t necessarily come into play then because the next job was always around the corner” the article reads. Good systems are easier to run when you have good software, which has helped most industries achieve massive gains in productivity and risk reduction.
3 things you can do now
1. Use a good accounting software (Cloud)
We see that the most successful builders and trades on our platform use a modern, cloud-based accounting software such as Xero, MYOB or Quickbooks Online. Being online (or “Cloud”) you benefit from being able to invite your Accountant or Bookkeeper to work on your accounts, and access your information from anywhere, so you can keep you on track.
2. Track your jobs like a boss
Staying on top of jobs as they happen is the key to good cash flow management, and you need to right tools to do that. Job by job, you need a real-time view of what’s going out, and how that stacks up against what’s coming in. Construction Job Management software like ours means you know exactly at your fingertips. With all your purchasing and invoicing done with the one tool, and everything neatly transferred to your accounting software at the click of a button.
3. Familiarise yourself with safe harbour provision
Company directors in the construction space should familiarise themselves with safe harbour provisions, which allow directors to attempt a business turnaround while being protected against personal liability for insolvent trading. “Safe harbour is really an insurance policy towards insolvent trading, but it’s something people don’t really like to talk about,” Andrew Spring from Jirsch Sutherland Insolvency Solutions says.
We’re on a mission to help builders and trades thrive, so talk to us about how you can use mobile and cloud-based tools to drive your business forward.