Seven ways contractors can navigate smart payments

  Posted by: electime      8th April 2024

Working as an electrical contractor comes with its fair share of perks. Without the constraints of a 9-5, you have more flexibility in the hours you work and the jobs you take on, giving you freedom in your professional life. But, working independently can also present challenges that traditional employees don’t run into.

One common hurdle that contracted electricians come across is managing their finances. Luckily, though, you don’t have to be an accountant to take control of your money anymore.

Whether you’re tracking expenses from buying tools for electricians or struggling to get paid on time, find out how you can overcome financial challenges with smart payments.

1. Cater to Cashless Customers

Smart payments utilise digital devices to take contactless payments, making it easy for your customers to tap and go once a job is completed. As a contractor, this is crucial for enabling quick, on-site payments, and helping you get paid on time.

It’s also vital if you want to work with cashless customers. Almost 40% of British consumers no longer use cash, making it inconvenient when a contractor doesn’t accept card or digital payments.

Add to this that many electrical works can cost thousands of pounds, which is rare to have in cash, and it becomes clear that smart payments are crucial if you don’t want to alienate large portions of your target audience. To cater to an increasingly cashless customer base, start using a card machine that accepts contactless payments and digital wallets.

2. Make Invoicing Easy

Smart payments often come with useful online services, enhancing the digitisation of your business accounts. One of the tools that’ll be particularly handy as a contractor is digital invoicing.

Every contractor knows how much of a pain invoicing can be. It’s repetitive, time-consuming, and tricky to understand if you’re new to the business world. But, with smart payment tech, those problems become a thing of the past.

Digital invoicing provides professional, branded templates that outline all the basic information you need to input. You can automatically generate invoices for repeat customers using past templates, with all the relevant data ready to go for quick and easy invoicing.

Once you’ve added the required details, your customer will receive a digital copy for their records.

Depending on the smart payment tech you’re using, you can also attach a payment link to your invoice. This takes the customer to the right payment system and auto-fills your details, reducing the chance of error and speeding up the transactions for both you and your customers.

3. Chase Invoices Automatically

Did you know that around 50 per cent of all builders have found it hard to buy materials due to late payments? This is a huge threat in the contractor industry and one of the most prominent financial struggles, causing a domino effect that can impact all other jobs you’re working on.

Luckily, smart payment options make chasing up invoices easier. Some systems enable automated emails, texts, or push notifications, reminding your customers when they’ve received an invoice and when payment is due.

This saves you time and stress, allowing you to focus on other jobs knowing that your invoices are being handled. It also makes it more likely that you’ll be paid on time, regulating your income for easier financial management.

4. Monitor Your Cash Flow

If you struggle to keep an eye on your income and expenses, smart payment options are a must-have for your business. By linking your card reader, payment links, and business card to a single, online business account, you can monitor all of your money from a single interface.

Many smart payment companies make it easier to understand your cash flow, too. By automatically splitting your essential electrical tools spending from your repeat car payments and income, for example, you can quickly see a detailed breakdown of where your money is going.

Track what you’ve spent and how much you’ve earned for greater awareness of your business’s financial health.

5. Stay Tax Compliant

Filing your taxes is a notoriously tricky and time-consuming process. But, it’s also mandatory for independent contractors, sole traders, and business owners, making it crucial that you find a tax management system that works for you.

By using a smart payment option with an online business account, filing your taxes is automatically simpler. Your cash flow is tracked digitally, giving you a much better grasp of your annual income and expenses, and you’re ready with the information you need come the tax year-end.

While you can also track your cash flow using spreadsheets, an account linked to your payment system reduces the chance of human error, recording all transactions as they happen. This creates a more streamlined, efficient taxable income tracking process

Your cash flow records and digital invoices also provide evidence of your income and deductible expenses. If your business is ever audited, you should have everything you need in one account, making it a breeze to prove your compliance.

6. Stay Agile

Unlike traditional payment technology and processes, smart payment options are flexible. You can take and make payments 24/7, schedule payments in advance, and edit regular outgoings before they’re executed.

This gives you more agility with your money. From adjusting your outgoings month-on-month to suit fluctuations in income to sending/receiving money instantly, smart payment tech offers more flexibility.

In the electrical contracting world, where work is anything but routine, this is essential for making your money work for your business.

7. Make it Easier to Work With Accountants

If your business is scaling or you’re struggling to understand tax, an accountant can make your financial management a lot easier.

But, if you’ve been working with DIY money management systems and paper invoices, you might struggle to compile all the financial information your accountant needs to start working.

That’s where setting up a smart payment system from the get-go comes in handy. Having all of your income, outgoings, and invoices recorded digitally makes it simpler to communicate your financial health to your accountant.

All they need is access to your smart payment system for a complete overview of your money, resulting in less back-and-forth communication and giving you more time to focus on your business.

Final Thoughts

Financial tools for electricians are essential if you want to keep up with an increasingly digital world. Make payments simpler for your customers, improve tax compliance, and take control of your cash flow with a smart payment option, designed to make finances easier for everyone.