NO MONEY IN MY BANK ACCOUNT
Want to learn how the Tradies Success Academy can help you optimise your trade or construction business for profit, growth, and time freedom?
Greg sits down with Chantel our Accounting Coach to talk about how to manage your cashflow and have clarity around allocating funds to things like tax, wages, business expenses and personal expenses.
Podcast Transcript
Greg Allan
Why do I have no money in my bank account Chantel?
Chantel
Hey, how are you going?
Greg
I'm just stressed because I got no money in my bank account again.
Chantel
Yeah, you're a business owner.
Greg
I know it sucks
Chantel
Business owner. They have all the money but it's not theirs.
Do you know that?
Greg
Tell me more about that.
Chantel
Ok. So, as a business owner, we get that really great privilege of hanging on to our money. Right? You can hang on to it most of the year. But we need to know exactly what's ours and what's not. And that's one thing, you know, you're, you're saving for a holiday you got it in one big bucket full of money. Really hard to say, “well, that 1000 bucks is for my holiday and that's for something else”.
Greg
So, you're telling me when I have all of that money in the bank, it's not all mine? What?
Chantel
(shakes head) But you know what? You get to decide where, how put it aside now, put aside early and then when you need it, you've got a short-term loan.
Greg
But whose money is that then?
Chantel
Well, I hate to say it, but probably the tax office, super fund.
But you know, when you pay your staff, you pay them the cash, you've then gotta say, ok, well, I'm not paying it right now, but I've gotta stick that money away for the tax office. Gotta stick that money away for the Super Fund. Cos at some point in time your business is growing. Right?
Yeah, it's growing real quick and numbers get bigger.
If it's a 20 grand BAS now it might be 100 grand BAS.
Greg
I seem to always come near zero again.
Chantel
Yeah, but that's putting the process in place now.
Now, if you put that process in place where you're siphoning that money off, stick it in another account, you know, you've got a late paying customer, we all have them, you might need to borrow it.
But if your mindset is, “that's not my money, I'm borrowing it to pay some supplier bills and then when my customer pays me, I'm gonna put it back.”
Greg
I siphon it for my renovation.
Chantel
Right. Ok. Well, you know, like part of being in business is choosing where the money goes, but if you're siphoning it out of there, first, your business is gonna fall down if you're not managing where that is and you know, even having a separate little account, this is the money I've taken out for myself. Yeah, that's fine. Take it out, take it out, take it out, talk to your accountant but know how much is meant to be there at all times because that's the control. Right? If you know what's there, you're not sitting there going, “Oh, all of a sudden my BAS is 100 grand.
You're going. “Oh, yeah, I've been putting money aside every week.” So it's just a number.
Greg
How do we find out how much money is the government's and how much money is mine?
Chantel
Very, very simple. If you're using something like Zero, MYOB, quickbooks, come speak to me. You know, there's so many reports already available to us. You don't need to wait until your accountant gives it to you.
You can have a look at it every day if you want to, you know, all of those little key indicators that you can look at any time you want to take back control of your own money and then, you know, if there's certain things you want to do with it, if you're making the profit, you can choose, but you've gotta know what's not yours because as an employee, you just get to, you know, you get what's left over as a business owner, you get all of it, but it's actually not all yours.
Greg
It's so good we've got an accounting coach at the academy! Thanks so much.
Chantel
Look, it's, it's not exciting, but it's so important, right? You need to know cash flow will bring you down a bit quicker than anything.
Greg
Yeah. Thanks Chantel.
Chantel
Awesome.
