Accounting for Engineers
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To scope a project then prioritise the tasks and manage the build and the budget you need to be creative, great communicators and organised. Engineering can be a pressure cooker environment dealing with deadlines, safety standards, people, processes and machinery. Of course, satisfying governments, developers and construction companies is never easy!
Over the years, engineers have become a niche area within our firm and as you'll read below, we deal with a broad range of engineers
including civil, chemical and computer engineers. We acknowledge it’s a challenging profession and you need to be big picture thinkers
to scope projects like the construction of roads, bridges, pipelines, power plants, canals, dams and buildings. It's therefore no surprise
to find that many engineers struggle with their business administration and bookkeeping. In fact, some of our engineering clients have told
us they wished their tertiary education included an ‘engineering economics’ module to help them understand the financial aspects
of running their own engineering business.
Here at BHT Partners, we can help you with all the usual business compliance issues including tax returns, GST, BAS, PAYG and superannuation. However, we can also assist you to manage your cash flow, prepare budgets, obtain finance and do some financial modelling. If required, we can also help you manage your payroll and sub-contractors. In addition, we love working with cloud based solutions and can help you with software selection and where required, train you to use the software. Our client brief includes helping you slash the time and cost associated with bookkeeping.
As forward thinking accountants we do more than just keep the score for our clients and our mission is to help you grow your revenue, your profits and the value of your business. Over the past quarter of a century, the engineering profession has become one of our niche industries and we provide accounting, tax and financial services to a range of engineering disciplines including:
|Drafting and Design Engineer
STARTING AN ENGINEERING BUSINESS
CONSULTANCY OR GOING FREELANCE
Engineers are one of our specialist client groups and having mentored hundreds of business owners through the start-up phase of their business we have built a reputation as business start-up specialists.
If you are looking to start an engineering business or buy into an existing operation, there are numerous issues to consider. You need to establish your business structure, complete tax and GST registrations, consider insurances, select an accounting software program and possibly explore your finance options. It can be a maze and haze of issues but as accountants and business advisors we can assist you in all of these areas plus provide advice on the preparation of a business plan, marketing plan and a cash flow budget. If you are contemplating employing staff we can also assist you with human resource matters including payroll, WorkCover and superannuation guarantee obligations.
Over the years our team of accountants have helped dozens of consulting engineers and freelance engineers get their business off to a flying start. We offer you experience, technical tax knowledge and most importantly, an intimate understanding of your industry.
Starting a business is a bit like building a bridge, that requires solid foundations. In a business sense, these foundations include the right tax structure and accounting software, adequate and appropriate insurances together with a marketing plan and a lead generation website. Your choice of business structure is absolutely critical and there are a number of different options including sole trader, partnership, company and trust. When selecting the most appropriate structure for your business we always recommend you ‘start with the end in mind’ because Australian tax laws are complex and changing your business structure at some point in the future can trigger a capital gains tax event that could prove very costly.
Whenever we provide advice on business structures we always take into account:
- Income Tax Minimisation
- Maximize Asset Protection
- Allow for the Admission of New Business Partners or Investors
- Comply with all Legal Requirements in your Industry
- The Risk Profile of Your Industry
- Consider Future Entitlement to Discount Capital Gains Tax Concessions
As a consequence, we often find the business structure for engineering clients is a compromise based on the relative importance of each of these issues.
Choice of Accounting Software
Another brick in your business foundations is your choice of accounting software. Poor record keeping is one of the biggest causes of business failure in this country and up to date, accurate financial records let you to make informed business decisions. The wrong choice of software can be catastrophic and too often we find business owners produce what we describe as ‘computerised shoebox’ records that cause frustration, waste time and create additional fees. This conflicts with our mission of helping you cut the time and cost associated with bookkeeping.
When selecting the most appropriate accounting software for your business we always recommend you match your business needs with your level of accounting skill. You’ll find we support a range of different software options but we do have a preference for cloud based solutions like MYOB, QuickBooks and Xero because of their flexibility and the fact that you can access your financial data via the internet and invite your accountant or bookkeeper to view your accounts at the same time. This means you can get bookkeeping support and valuable advice in real-time. You can also log-in any time, anywhere on your Mac, PC, tablet or smart phone to get a real-time view of your cash flow. Your data is automatically backed up and users have access to the latest version of your financial data plus you never need to worry about installing software or program updates.
Tools, Checklists and Plans
For an engineering project, you also need the right tools and when 'building' your business we have developed a number of tools including a start-up
broken down into various categories including:
- tools and equipment
- professional advice and software
- information technology costs – software and hardware
- marketing and signage
- vehicle costs
This checklist will help you identify all your potential establishment costs and these figures then feed through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into a business plan template we have designed that will help you secure funding from external sources like a bank. Another useful tool is our business start-up checklist that walks you through key business registrations you might require, insurance options, legal issues, branding and domain name registrations for your website.
For most types of engineers, the biggest challenge to starting and running your own business is the specialist equipment, tools, machines, computers and software that are necessary to plan and complete your projects. Buying and maintaining these tools can be costly and we have a network of Vehicle and Equipment Finance specialists who can assist you with your finance needs (chattel mortgage or lease). They can also get you fleet pricing on your new car, ute or light commercial van that could save you thousands of dollars. Through another affiliate group we can also help you source funds to finance your business purchase.
For an engineer your vehicle is one of your most important business tools. To learn more about the alternative methods of claiming your vehicle expenses and the distinction between a business and private trip, you can read our Motor Vehicle Tax Guide
In summary, if you're contemplating starting an engineering firm or working as a consulting engineer or freelancer, you don't need to reinvent the wheel. We have all the tools and resources to help you get your business off to a flying start. In fact, that’s just the beginning because as accountants we can do some financial modelling and prepare some ‘what if’ calculations based on different price points so you know your business’ best and worst case profit scenarios. Next, using industry benchmarks we can compare the performance of your business against your competitors so you understand what is working in your business and what areas need working on.
MARKETING AND GROWING YOUR ENGINEERING BUSINESS
Engineering is a crowded and competitive industry. We recognise the fact that your marketing could be the difference between gloom and boom and one feature that distinguishes us from other accounting firms is our marketing expertise.
Most engineers rely on their reputation and referrals to grow their business and while these ingredients certainly remain important, in the digital age you need to shift your marketing focus online. Increasingly local searches like ‘Computer Engineer Victoria’ are driving traffic to your website which is often the first touch point with a potential new customer. As you know, in business, you only get one chance to make a good first impression and your website is your 'online shopfront' and silent sales person working 24/7 to promote your business.
Our network of marketing specialists can assist you to plan and build your website, optimise it for Google and the other search engines plus assist you with your content creation including video production and digital publishing. If your website is missing features like lead magnets, calls to action or landing pages they'll help you build them plus they'll also introduce you to strategies like re-marketing and search engine optimization to drive more traffic to your website.
Your brand should resonate with your target market and our affiliates can assist you with the development of your business name, logo, slogan and corporate brochure. They can assist you to write blogs and produce a client newsletter plus help you harness the power of social media to win more referrals. If you aren’t using some of these marketing techniques your business may not reach its full profit potential.
We will help you understand the four ways to grow a business plus identify the key profit drivers in your business. We can walk you through a number of profit improvement strategies and even quantify the profit improvement potential in your business. Our role is to make sure you know your numbers and you don't leave any profit or tax savings on the table. Our mission is to help you fast track your business success and the team at BHT Partners offer you a range of accounting, taxation, marketing and business coaching services including:
- Start-Up Business Advice for Engineers
- Advice regarding the Purchase or Sale of your Engineering Business, Firm or Consultancy
- Tools including the Start-Up Expense Checklist
- Templates for a Business Plan, Cash Flow Budget and Letterhead
- Advice and Assistance with the Establishment of Your Business Structure
- Tax Registrations including ABN, TFN, GST, WorkCover etc.
- Preparation of Business Plans, Cash Flow Forecasts and Profit
- Accounting Software Selection and Training (Xero, MYOB etc.)
- Preparation and Analysis of Financial Statements
- Preparation of Finance Applications
- Bookkeeping and Payroll Services
- Tax Planning Strategies
- Marketing Assistance including your Branding, Brochures etc.
- Website Advice & Assistance - Development, Content and SEO
- Wealth Creation Strategies and Financial Planning Services
- Engineering Industry Benchmarking and KPI Management
- Vehicle & Equipment Finance (Chattel Mortgage & Lease)
- Payroll, HR Advice & Employee Relations and Workplace Laws
- Advice & Assistance with Pricing your Services
- Recession Survival Strategies
- Advice regarding Business & Risk Insurances
- Business Succession Planning
In summary, we are so much more than just tax accountants. We are business and profit builders who strive to deliver practical, cost effective advice that could give you a serious competitive edge in your industry. Over the past 20 odd years engineers of every type have become a niche area within our firm.
If you're a committed and ambitious business owner looking to accelerate your success we invite you to book a FREE, one hour introductory consultation to discuss your business needs. You can expect an hour of practical business, tax, marketing and financial advice that could have a profound effect on your future business profits. To book a time, contact us today and let's get to work on your business so it's more profitable, valuable and saleable.