Bookkeeping for tradies

business.gov.au recommends putting quotes in writing, to reduce misunderstandings and the risk of disputes or unpaid work. Beyond your business details, it suggests a written quote include at least:

• the customer's name and contact details
• a clear description of the work
• itemised and total costs
• any variations and revisions discussed
• payment terms, such as the due date and any late payment penalties, and your preferred payment method
• the dates the work will start and finish
• the date the quote expires
• space for the customer to sign and date their acceptance.

business.gov.au also suggests pricing a quote to make a profit rather than only to win the work, with every cost counted and a fair margin added. The signed quote is the first document in the job's record.

Give every job a number or short name and use it on everything connected to it: supplier dockets, timesheets, photos of receipts and the final invoice. That one reference is what lets you pull the job together later.

Our guide to job costing explains how to turn these records into the cost of each job.

Jobs change once work starts. business.gov.au notes that if a customer doesn't pay and the agreement was partly verbal, you'll need evidence of what was agreed, and gives emails or texts as examples. Before doing extra work, send the customer a short message describing the change and its price, and keep their reply in the job's record. Add each agreed variation to the invoice as its own line, so the final bill can be traced back to the quote.

Counter purchases, fuel and small tools are bought between jobs, and their receipts are easily lost in a vehicle. The ATO's record-keeping tips start with keeping accurate records of all cash and electronic transactions.

• Photograph each receipt when you get it and write the job number on it, or "general" for consumables.
• Ask suppliers to put the job number on dockets for materials bought on a trade account.
• Check each trade account statement against the bills you have entered, so a missing docket shows up before the statement is paid.

A ute or van that doubles as the family car, or one phone for work and home, needs extra care in the books. Keep a record of how the vehicle and phone are used, and store it with the bills it supports, so your accountant can work out the business share.

Keep a list of the tools, equipment and vehicles the business owns or leases, with the date each was bought or leased and what it cost. business.gov.au suggests listing the equipment you need in your business plan and updating it as the business grows. How a tool or vehicle purchase is treated in the accounts is a question for your accountant.

business.gov.au describes payment terms as setting when you expect to be paid, for example all up front, in instalments, on delivery or after 30 days, and its cash flow guidance mentions deposits for special orders. On a longer job, the quote can set out stages with a payment due at each.

Record each payment against the job and the invoice it relates to, and show deposits already received on the final invoice so the customer is billed only the balance. How a deposit is recorded before the work is done is a question for your accountant.

business.gov.au says a customer can request an itemised bill for a service within 30 days of receiving the original bill or invoice, and that it must be provided free within 7 days of the request. It has to show how the price was calculated and, where they apply, the labour hours and hourly rate, and the materials used with what was charged for them.

That is only possible if the job record already holds the hours and materials. Invoicing straight from the job record, as soon as the work is finished, keeps the bill consistent with the quote and its variations.

Record every cash payment against its job and invoice, give the customer a receipt, and bank the cash. business.gov.au suggests banking cash regularly and not holding large amounts, because cash has a higher risk of theft and mistakes than payments that go straight into the bank. A deposit that matches the receipts written is the simplest proof the cash reached the business.