5 Ways To Grow Your Trade Business
leadership
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5 min
You probably didn’t start your trade business to be a bean counter and you’re not alone. One of the biggest challenges South African trade businesses face is managing their finances effectively.
Did you know?
According to the Xero Time to Build Report
, the adoption of tools like cloud accounting has grown in South Africa, from 13% of SMEs using it in 2017, to 61% in 2020. Technology like cloud tools and automation are helping to level the playing field for small businesses; however, many still face barriers to adoption, meaning almost 40% of small businesses still don’t use such tools.It’s not surprising - managing finances can be daunting enough and that’s before you add a seemingly complex technology to the mix.
Accounting tools can be confusing and daunting without the proper training - but not using them can hold you and your business back from reaching its full potential - whether it’s not knowing what’s going on with the finances or not being able to access loans to help you grow.
In this article, we’ll break down exactly what accounting software is, how it can benefit your trade business, when you should consider making the switch from manual bookkeeping systems, and how to choose accounting software for your trade business.
Table of contents
- What is accounting software?
- 6 benefits of accounting software for trade businesses
- When is the right time to switch to accounting software?
- How to choose accounting software for your trade business
- How accounting software can help your trade business grow
What is accounting software?
First things first. You might’ve heard of accounting software before but what exactly is it and how can it do for your trade business?
Accounting software organises, records, and analyses all the money that flows into and out of your trade business. Using accounting software helps ensure that your financial management is effective and efficient.
Get this,
the percentage of South African SMEs satisfied with their productivity increased from 68% in 2022 to 78% in 2023
, and SMEs named increased efficiency or productivity as the main driver of business confidence.For trade businesses, tracking inventory, handling expenses, quoting and invoicing are complicated tasks. You can do it on paper and spreadsheets - but to do it well you need the right tool for the job.
Accounting software is a centralised hub where all these areas come together, making your operations more efficient, and putting you in control of your trade business's growth.
Get started:
Check out this video from NetSuite
to get more info on what accounting software is and what it does.6 benefits of accounting software for trade businesses
Now that we’ve explained what accounting software is, let’s dive into how it can benefit your trade business.
Some of the ways accounting software can benefit your trade business include:
- Increased efficiency:For trade businesses, time is money. These tools automate tedious tasks, from inventory tracking to invoicing, freeing up valuable hours that you can spend on trade jobs.
- Financial clarity:When you’re dealing with hundreds or thousands of transactions per month, clarity is key. Accounting software provides real-time insights into your cash flow, outstanding payments, and expenses. For trade businesses navigating the unpredictable South African market, this clarity helps you make informed decisions.
- Improved accuracy:If you’re doing all your accounting with pen and paper, errors are bound to creep in. With accounting software, automated calculations, standardised processes, and error checks ensure that financial records are accurate, protecting you from errors that could potentially sink your trade business.
- Tailored solutions:No two trade businesses are the same, which means they’ll have unique needs. Accounting software caters to these needs with features like customisable invoicing and specialised inventory management, that adapt to fit the specific needs of your trade business.
- Grows with your business:You want your trade business to grow and accounting software can help you do just that. As your trade business expands, these platforms grow with you by allowing for increased transactions, expanded inventory, and evolving financial complexities, so that your trade business can thrive.
- Regulatory compliance:Staying compliant with SARS tax regulations and financial standards is a non-negotiable part of running a trade business. Accounting software protects you from getting into SARS’ bad books by keeping your records updated, ensuring you’re compliant with regulations, and simplifying tax-related procedures.
Get started:
For a more detailed breakdown of the features and benefits of accounting software, check out this article from business.com
.When is the right moment to move to accounting software
Deciding when to make the leap from traditional bookkeeping methods to modern accounting software is critical for trade businesses so timing is everything.
Let’s look at a few of the signs that it’s time for you to make the shift in your business:
1. Your trade business is growing
As your trade business expands, manual bookkeeping will become more complicated and time-consuming. If you want your trade business to grow, you need solid financial management. Accounting software ensures that your financial systems grow in parallel with your trade business.
2. You need instant access to your financial information
At a certain point, your trade business will have too much financial data for you to easily find what you’re looking for. Accounting software gives you immediate access to important financial data, like your current profit levels, expenses or cash flow helping you make better financial decisions.
3. You have a lot of repetitive administrative tasks
South African businesses lose 1,616 hours, or 96,960 minutes, per year to admin
. Accounting software automates these routine processes, saving you from this time-consuming manual work and allowing you to focus on more productive tasks such as trade jobs or thinking of ways to grow your business.4. More human errors are creeping in
Human errors in manual calculations and data entry can have a big impact on your trade business’ financial accuracy. Accounting software minimises these errors, ensuring that your financial records and reports are precise and accurate.
5. You’ve got a limited understanding of accounting
Not everyone in your trade business has expert accountants on hand. Accounting software simplifies complex financial tasks, making it possible for almost anyone to efficiently manage their financial operations.
6. You’ve been recommended to start using accounting software
If trusted advisors, industry experts or even SARS suggest that you should use accounting software, it's a sign that you should make the switch. These outsiders often recognise the benefits that accounting software can offer your trade businesses.
Get started:
Check out these tips from dummies.com
that you should consider when moving from a manual bookkeeping system to accounting software.How to choose accounting software for your trade business
Now that you know the signs when it's time for accounting software in your trade business, the next step is to choose the right option for you.
The goal in this critical step is to ensure the tool you choose integrates with your business seamlessly and that you’ll be able to benefit from all of its features.
Here’s what you should consider when choosing accounting software for your trade business:
- Evaluate your business needs:What financial requirements do you have? Do you need invoicing, inventory, payroll, and reporting?
- Research and compare your options:Explore and compare software options based on features, costs, user-friendliness, and scalability.
- Can it adapt to your business:Choose adaptable software that suits your current needs and can grow with your business.
- Get recommendations:Get insights from your peers and reviews to make an informed decision.
- Try it out first:Use free trial periods to test the software functionality before fully committing to a solution.
- Get training and support:Invest in training for your team and ensure you have access to reliable customer support.
- Monitor and adapt:Regularly review the software's impact on your trade business and optimise how you use it to get the most out of it.
Get started:
Check out this guide from fundinghub
that covers the best accounting software solutions for South African SMEs to help you find the right one for your trade business.How accounting software can help your trade business grow
For South African trade businesses, embracing accounting software is more than just a convenience; it's a strategic move that can encourage growth.
In fact, 57% of ServCraft customers use accounting software, helping them efficiently manage finances, streamline their operations, and make better financial decisions.
By switching to a tailored accounting solution, you not only simplify daily financial tasks but also ensure that the future of your trade business is robust and financially sound.
Be sure to keep an eye out for the rest of our articles where we’ll dive deeper into other areas of financial management and how you can use it to grow your trade business.