Hot tip for all sole traders: This is how to turn 6 hours into 30 minutes of admin a week
It is a truth universally acknowledged that no person working for themselves gets into it for the fun of the financial admin. Paying bills! Chasing invoices! Bookkeeping! Sit down, you’re getting way too excited now.
Unless you just love reconciling receipts or calculating tax and GST obligations when you could be watching MasterChef, your time could be better spent on things that really bring you joy.
“If you want more time to spend living the kind of life you want to live, you shouldn’t have to be a bookkeeper by night and a business owner by day,” says Justin Bohlmann, Head of Growth at all-in-one financial management platform Thriday.
Hear, hear. No matter what you do for work, whether you’re a tradie, a social media manager or a beer fermenter, the goal is to spend your work time in the zone, laser-focused on doing the thing you love. And then, if you manage to find some spare time, enjoy a bit of work-life balance. Nice in theory, hey?
What the research says
In practice, sole traders are putting in excessive hours each week on financial admin. Thriday’s SME Banking, Accounting & Financial Management Report found that small business owners spend an average of six hours and 19 minutes per week on financial admin tasks like banking, accounting and bookkeeping.
That’s 40.3 working days per year. Looking. At. Numbers.
All the power to you if that’s your thing. With the number of sole traders increasing by 12.7 per cent to nearly 800,000 businesses in Australia over the past financial year, there’s a high chance that there’s quite a few people who don’t love the financial admin part of being their own boss.
Good news if you want the luxury of time
A number of tech solutions have emerged over the past couple of years that automate these tasks to free up freelancers and contractors. One of those is Thriday, which automates bookkeeping, calculates taxes and shows the health of a business in real time on one platform.
“Our goal is for small business owners to take the average amount of time of six hours a week managing their financial admin down to about 30 minutes,” Justin tells Flying Solo.
The principle is that, by automating the rules of accounting and bookkeeping, the platform does the heavy lifting on data entry and calculations that would usually take a person hours a week.
“People spend hours on a Sunday evening manually reconciling receipts, trying to match up bank transactions to a shoebox full of paper receipts,” says Justin. “At the end of the day, bookkeeping and accounting is all rules, so why can’t you automate those rules?
“Using your bank account data, we can automate the bookkeeping, the accounting and the tax. So that’s something you don’t have to think about.”
But what if you just like to DIY?
Again, all the power to you. But with technology comes choice, which can impact the makeup of your workload each week. As Justin highlights in the following scenario, doing it the DIY way can be extremely time-consuming and expensive.
“You start your business, you want to focus on the things that you’re good at,” he says. “You know you’re going to need an accountant, so you go to an accountant, they say ‘Yeah, no problem, but you’re going to have to set up Xero or MYOB so you can give me the data and I can process that more easily’.
“And then you ask them if they can help you set it up. They don’t have time to help you set it up, so they recommend a bookkeeper. The bookkeeper sets up your chart of accounts and categories, and teaches you how to reconcile those transactions. At the end of the quarter, you’ve forgotten how to do all of that anyway, so you end up paying your bookkeeper to come back in.
“And then, you go back and forth on a couple of different spreadsheets and the accountant processes your tax for you, and all of a sudden you are still doing all of the work, but you’re paying the bookkeeper or the accountant for the privilege of doing that. That shouldn’t be the case.”
Now there may be some accountants reading this with a raised eyebrow. Yes, it’s always a wise idea to talk to an accountant about major business decisions. But it all comes down to what you’re using the accountant for.
“Accountants are super valuable. But if you ask any accountant, they don’t want to be providing a data entry service,” he says. “Ask any business owner, they don’t want to be entering data either. So, we automate that data entry process to make accountants’ lives easier and to make small business owners’ lives easier.”
The points of difference to consider
With a number of financial management tools on the market, Thriday’s point of difference is that they have banking built into the platform*. This powers the automation when you get paid into a Thriday bank account, allowing you to automate invoices, as well as payment reminders, directly from there.
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Other features of note include forecasting the amount of tax you’ll need to pay at the end of the financial year and the paperwork needed to lodge BAS and tax. There’s also expense tracking and management, including a quick-scan feature where you can upload your receipts so you don’t need to reconcile manually.
In these times of cash flow anxiety, using a service like Thriday can also help get invoices paid faster. Justin highlights particular features like “automatically following up on unpaid invoices through to telling you whether specific projects or products are profitable.”
If that ignites your fire a whole lot more than doing it manually, give some serious thought to outsourcing financial admin to enjoy cooking shows and bush walks instead.
Try Thriday and check out their pricing options here.
This article is brought to you by Flying Solo in partnership with Thriday.
Feature image: AdobeStock
*Bank account and Visa Debit card issued by Regional Australia Bank Ltd ABN 21 087 650 360 AFSL & Australian Credit Licence 241167
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