Ready to simplify the way you do expenses?
Expenses management is something a lot of business owners dread. They envision boxes full of paper receipts and time spent painstakingly trawling through piles of old paperwork every month.
Once upon a time expenses management was clunky, awkward and time-consuming, but with some good habits and some nifty technology by your side, managing your expenses doesn’t have to be a headache.
Read on for our top tips for streamlining your expenses.
Know your allowable business expenses
As a business, there’s a range of expenses you’re entitled to, which can help keep tax down.
HMRC’s rules on claimable expenses can be a bit fuzzy but, generally speaking, the golden rule is that they must be wholly, exclusively and necessary for business.
Some of the most common for limited companies include:
- Accounting Fees
- Advertising / Marketing Costs
- Accommodation whilst travelling for business
- Business mileage (see current rates here)
- Banking costs (fees & interest)
- Car, Van & Travel Expenses
- Donations to charity
- Christmas party for staff
- Entertaining (although this is very restricted for tax purposes)
- Equipment & machinery purchases
- Eye Tests (but not glasses)
- Interest costs (on business loans, overdrafts, equipment finance)
- Legal & Professional costs
- Pension payments
- Professional subscriptions
- Salaries (for you as the owner and your team)
- Telephone & Internet
- Travelling & subsistence Training / CPD
- Rent and/or working from home
Record expenses as soon as you spend them
Too many businesses get tripped up by putting off bookkeeping, leaving it too late, or avoiding using bookkeeping software altogether.
Recording the transaction as soon as possible means it's done, out of the way, and your receipts and invoices won’t get lost or forgotten about.
When it comes to business expenses, little and often is the way to go.
Set aside the time to regularly do your expenses, whether it be weekly or monthly. Keeping your expenses up-to-date means you’re working with accurate numbers and minimises the chances of forgetting to record transactions.
Invest in good software
Transform the way you manage your expenses into something simple, painless and paperless.
With apps like Dext, expenses management couldn’t be easier. It’s as simple as photographing your receipts and uploading them to Dext, then the app will publish them to your accounting software. All that’s left to do is reconcile them!Bookkeeping and accounting software can help you:
- save time
- make accounting easier
- view financials anytime, anywhere
- keep accurate, up-to-date records of all your finances
- Take the headache out of expenses management
Want to find out how accounting software can work for you? Read our guide on how to get the most out of your accounting software.
Hire a bookkeeper
Although it all sounds pretty straightforward, things can go wrong when business owners don’t use accounting and bookkeeping software correctly. Mistakes like categorising costs incorrectly in your accounting software can lead to incorrect data and skewed financial reports, meaning you’re not seeing an accurate picture of your business’s finances.
That’s why we’d recommend having a bookkeeper in-house or hiring a good accountant to take care of it for you.
If you have a large volume of transactions, or simply don’t have the time to manage the books yourself, it could be time to outsource a bookkeeper or hire one in-house. This ensures your books are always up-to-date and done to the highest standards.
A qualified bookkeeper can take care of the more complex bookkeeping tasks, freeing up your time to focus on the business. And since they’re a professional, they’ll probably be able to do the work in half the time you can! We recommend looking for a bookkeeper that’s proactive, tech-savvy, and knows your industry well.
Ready to level up your business?
We know how important it is to run a successful and profitable business. That's why we've created a Limited Company Owner Guide packed with everything you need to know to get your feet off the ground. Your role as director, what expenses you can claim, what you need to file and when– you name it, we know it. And the best part? It's totally free and always will be. Just a little gift from us to you!