There’s no denying that tracking expenses and bookkeeping, in general, are pretty dull tasks. It’s never anyone’s top priority which is why mistakes can creep in. But they're completely avoidable. Follow these tips and more in this blog and become smarter about small business expense tracking.
Quick and Easy Tips to Help You Get Smarter
1. Keep Your Records Organised
Cluttered records are definitely going to bring you a huge headache when it comes to tracking your expenses. You don’t want to leave it too close to the deadline by trying to decipher where your money was spent in the last year.
Instead, keep your records in good shape and neatly organised. That way, you know exactly what’s stored so you can save plenty of valuable time.
Also, make sure you stay on top of your records and don’t do it as a one-off ahead of tax deadlines. To make it even easier for yourself, try maintaining daily records so that you can track the financial condition of your business with no effort and it’ll be plain sailing from there.
2. Create Separate Business and Personal Bank Accounts
There’s nothing worse than searching through endless personal statements to find the one vital business expense that you need to report on. Rather than combining your business expenses with your weekly shopping, create a new business account to keep both costs separate.
It’s easy to lose track when both are combined. Open a new business account so there’s never any confusion between the two. When it’s crunch time and you need to do your books, you’ll know which account you need to look in to find important financial information.
3. Always Back Up Your Records
April 2019 welcomes the introduction of Making Tax Digital (MTD), so there’s obviously going to be more reliance on technology for your small business. The worst case scenario? Technical issues arise and you lose your records. Or you can’t access them for a while when you need them the most.
To make sure that’s never an issue, back up your records so you have something to fall back on. It’s good practice to back your systems up regularly. You won’t lose any potential work and you can just continue working as normal knowing you won’t lose data. Simple.
4. Keep Hold of Your Receipts
You don’t need to store every single receipt - just make sure you keep your business-related ones somewhere safe. This is so that you can claim for business expenses depending on the industry you’re working in.
Let’s say you’re running your small business from home. By storing receipts, you can claim back some domestic bills, for example.
So, keep them in those neat and tidy records we mentioned in the first point so that you’re never upset about missing out on money you could’ve claimed back.
5. Use the Right Software
To help you track the expenses of your small business and keep it uncomplicated, use a digital app or software so that you’re ready for the MTD deadline. Using the right software can remove the hassle of keeping your incomings, outgoings and taxes by organising them properly so that you can manage your financial records without worry.
Thankfully, you don’t need to be a tech-guru to get to grips with the software and apps that are now available to make the entire process efficient. Some apps are designed to be both sleek and simple to use so that you only use the features you actually need. When tax season approaches, you won’t be overwhelmed by features that don’t concern you.
Although it’s something the government has enforced to cover their own backs, it’s still a good solution to give you extra peace of mind. Everything will be organised, ready to submit and tracking expenses will be a piece of cake.
Prepare Your Business for the MTD Introduction
The government is rolling out a change to the taxation process in April 2019, something which impacts us all. The plan was to swap paperwork for software, so you need to make sure you’re in the best position possible for when the time comes to switch.
Even though it’s a process to make the government’s life easier, you can make bookkeeping and tracking expenses effortless for yourself too. We’ve put together a free summary sheet of everything MTD-related so that you can be fully knowledgeable for when it’s time to eventually make the change.
Click the link below to grab your free copy.
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