How to manage the money side of your business without the stress
Running a trades business isn’t just about the work on-site. You’ve also got to deal with the money side, like GST, invoices, and making sure there’s enough in the bank to pay the bills, cover suppliers, and sort tax when it’s due.
It’s easy to let it slide when you’re busy, but that’s when the pressure builds. With a few simple steps, tradies in NZ can stay on top of it without spending hours sorting through all your invoices and receipts.
Stop the GST stress before it starts
One thing I tell every client is this: GST isn’t yours, so don’t treat it like it is.
The easiest way to stay on top is to open a separate GST account. As soon as you get paid, transfer the GST portion of 15% straight into it. Even better if you can add an extra 5 -10% on top.
Think of it like three buckets of money: GST, tax and the everyday costs of running your business, such as paying suppliers, fuel, wages, insurance or buying new tools when you need to.
When your GST payments are due, the GST bucket is full and ready to go.
Setting it up this way means you’re not stressing about where the GST money will come from, and you can stay focused on the tools, knowing it’s already sorted.
Invoice on time, so you’re not left short
As a tradie, you’re probably not sending weekly or even monthly invoices. It’s usually a deposit up front, then nothing until the next stage or until the job’s complete. That can mean big invoices close together one month, and then nothing for a while.
Whatever the setup, the main thing is to send each invoice on time. The longer you wait, the longer you’re covering the cost of materials, wages, and fuel yourself.
Using software like Xero makes it easy to send invoices as soon as the work is done. You can also set up reminders so clients get a prompt without you having to follow them up every time.
Stay on top of compliance without the hassle
GST returns and tax deadlines always come around quicker than you think. Leave it too late and you risk penalties from IRD.
So how do you keep on top of it?
Using software like Xero means GST is tracked on every job, and your return is lined up ready to go. A Xero Bookkeeper can check the details and submit them on time, so nothing slips through the cracks.
Set it up properly from the start or get an Xero Bookkeeper to do it for you, and tax time won’t be a mad rush to avoid late fees.
Quote with confidence by knowing your numbers
Cash flow isn’t just about paying bills. It also affects how you quote jobs. If you’re not clear on what’s coming in and going out, it’s hard to price work properly and make a fair profit.
That’s why knowing the difference between markup and margin matters
Let's say a job costs you $1000 and you want to make a 20% margin (profit).
If you add a 20% markup, you charge $1,200. That leaves you with $200 profit, which is only about 17% of the total price.
If you want a 20% margin (profit), you’d need to charge $1,250, because then the $250 profit is 20% of the total price.
So markup is what you add, and margin is what you keep.
Sorting this out means you’re not guessing. You can back your quotes with numbers and know there’s money left once the bills are paid.
Need a hand keeping on top of it all?
Putting these steps in place takes the stress out of GST, invoicing, and cash flow. But if you’d rather not do it on your own, Shadow Administration can help.
We’ll set up the right systems, keep the books tidy, and make sure the money side of your business runs smoothly. That way, you can spend more time where you want to be, whether it’s on the tools, with the family or enjoying your downtime.
