Do you feel as though it’s very difficult for you to keep track of your business expenses? If so then now is the time for you to make a change. If you don’t then you may find that you end up struggling to monitor everything and this can work against you.
It’s so important that you understand your business finances, and that you take the time to avoid any nasty surprises. Making data-driven decisions will benefit your company going forward, not to mention that it will help to give you clarity when you need it. If you can, create a budget and check your current performance against previous years. This will give you the crucial insight you need, and it will also help you to identify the areas where you need to save, or even invest.
Separate your Corporate and Personal Accounts
It is so important that you keep track of your employment expenses as your company grows. Fully separating your business expenses and your personal expenses will help you to simplify the process and it will also help you to avoid spending hours sifting through all of your receipts. At the end of the day, it is not a legal requirement for you to split your personal accounts from your business ones, but it is a legal requirement for you to maintain accurate financial records. Finalizing your accounts and making tax returns for your business is so important. This will help you to keep track of everything and it will make your end-of-year overview much more accurate.
Establish a Policy
There are many different approaches that you can adopt if you want to stay on top of your expenses. The main thing you have to remember here is that you have to be organized and efficient. You have to follow a clear policy that shows you what is reimbursable and what isn’t. Centralize your account management where possible as it will be much easier to control everything. You also need to make sure that your policy is applied consistently. By looking at your company budget overall, you can take the time to secure preferential rates for any key providers you may work with.
Pay via Card
Most banks and financial providers can show you real-time transaction data, as well as a historical view of your statements. You can then import this into your financial system automatically. It is important for you to pay for as many things as you can with your bank card, as this gives you an automatic digital record of everything you have spent. Specialist providers can help you with a business expense card, as this can eliminate petty cash. It also gives you the chance to monitor your staff individually so you can see who is spending more, and who is spending less. Little things like this are ideal if you want to block certain types of transactions. If you want to step things up a notch then check out Coast Pay.
Receipts can be a real nuisance to keep hold of. With that in mind, they are very important when it comes to tracking your expenses. It’s possible that you may have to provide your receipts if you end up being audited. If you can keep everything organized then this will make the process a lot easier. Your bank may allow customers to upload photos of their receipts to their mobile app, as this is a great way for you to capture and manage your sales. This is usually done automatically, so you don’t have to worry about a thing there.
Scope out What your Business Needs
It is imperative that you scope out what your business needs. Expense management software is very handy here, as it can help you manage your reimbursement process via automation. When you consider the expense management solutions that are out there, you should know what you need it for. Include any challenges you may be experiencing in the system you have right now. If you can take the time to understand this now, then you will be able to craft the perfect system for both you and your business.
Get a Business Credit Card
Having a business credit card is so important. A business credit card gives you the chance to make big purchases, even if the money is not available to you right now. You can invest in the future of your business or you can even take steps to increase your available credit line, even if you don’t plan on using it. A higher credit amount shows that your company finances are in good standing. Business credit cards are also a very good way for you to support favorable negotiations with all of your employers, not to mention that they can also help you to establish a good credit history. This is so important if you ever need to secure additional financing or if you want to take advantage of various perks or rewards. Sometimes you can exchange these for travel points or even more savings.
Decide on Accrual Accounting or Cash
Choose a very consistent accounting method as this will help you when it comes to tax purposes. As a general rule, if you have three years of 25 million or less in gross receipts, before tax, then you may want to go for accrual accounting. Public companies have to use accrual accounting as it is the best way for them to make the most out of their accounting methods in general.
Cash-based accounting can be easier for small businesses to manage. It is way more straightforward as you will record the transaction when you have been paid for it. Additionally, with this method, your business expense tax deductions will occur within the same tax year that they are paid. If you do decide to opt for accrual basis accounting then you will keep your sales data in your bookkeeping records when you have completed the sale. One thing to know about accrual accounting is that you can submit deductions for that tax year, regardless of when the final payment was made. This gives you an accurate outlook as it will take into account the long-term view of your business finances.
Choose a Good System
It is so important that you choose a solid system when the time comes for you to track your expenses. Accounting software makes it easier than ever for you to track invoices from your suppliers while also helping with rent payments or payroll. They also help to reduce some of the work that is associated with tracking expenses. As time has gone on, accounting software has become much more efficient and it is also much more accurate as well. This means you can track anything you need with ease without having to worry about anything. When choosing your software, you need to take into account pricing, data storage and even functionality. If you can do this then you will soon find that it is easier for you to get the result you are going for.
Of course, if you want to make the most out of your business expenses then make sure that you’re not paying more for something, just so you can claim it back as an expense. If you do then you may find that it becomes much more difficult for you to keep on top of your current financial situation and that you end up needlessly plunging your business into debt, which is the last thing you need.