Everyone hates keeping track of business expenses. It’s time-consuming, incredibly complicated, and equally easy to forget about.
There is nothing quite as frustrating as reaching the end of the financial year only to have to calculate your exact mileage to and from work for the entire year. It’s a mind-numbingly dull task made much harder if you haven’t kept hold of all your receipts.
Of course, this process is made all the more difficult if you’re running a business. Why? Because you don’t just have yourself to worry about, you’ve got to consider and log every single employee’s expenses, as well as all the infrastructure, products, and overheads you’ve used to keep your company functioning over the previous twelve months.
Naturally, this can be complex, and you can’t afford to put it on the back burner. In fact, not only is it a legal requirement to log your taxes, but you can save a huge amount of cash simply by claiming it back on expenses (so long as you can prove it).
To help, here’s a simple guide to keeping track of business expenses:
Use specialist software
One of the most effective ways to keep track of your business expenses is to use specialized accounting software.
This is because the accounting software largely takes the responsibility of logging and calculating your business expenses out of your hands, which relieves your schedule of a huge amount of work.
Although it can’t complete the entire process by itself, it can help you keep track of your expenses during the course of the year, which is a godsend when it comes to filling in your tax return.
Use a dedicated bank account
Another great way to keep abreast of your business expenses throughout the year is to set up and use a single dedicated business bank account.
By using this account to pay for all business expenses, you can clearly look back through your statement and check what you have paid out on.
This saves you the hassle of trawling through multiple personal and corporate accounts, trying to find a single expenditure, which could take hours.
What’s more, when you use a single bank account, you can better budget throughout the year. This is because you can clearly see what has come in and what has gone out.
Keep all your receipts
Our last piece of advice is perhaps the most obvious — you need to keep hold of all your receipts.
Although this is a basic tip, you would be amazed how few businesses do this. Although it has become easier in the age of digital receipts, there will still be physical ones you need to collect, such as receipts from gas stations.
When collecting receipts, remember to keep them in a safe place out of harm’s way that’s also being easy enough to find at the end of the tax year.