If business expenses are not managed correctly, not only can they be a financial burden but they can also consume much of your time. Being on top of your expenses also has other benefits too, as keeping track of your expenditure means predicting cash flow becomes much easier and more accurate and allows for important business decisions to be made faster and with more confidence. Ensuring that your organisation has an effective expense management process can have a huge impact that can save time, money and hassle.
So what are the ways of tracking my business’s spending?
● Expense tracking with budgeting journal or spending log
Some people might be familiar with creating a spending log as a student to keep track of expenses. Some entrepreneurs still use a notebook or an accounting entry book to record individual personal expenses. This is a good habit of keeping track of your spending and being aware of your cash flow, however, this is not ideal for businesses, where the frequency and size of transactions can be much higher and the more employees you have the more difficult it can quickly become to track.
● Using traditional Excel spreadsheets for expenses
Many small firms and businesses use a spreadsheet program like Microsoft Excel or Google Sheets to track their employees’ expenses. Although less expensive than accounting software, the manual process of checking, approving and chasing before they are entered into your accounts and financial reports is very time-consuming. This is far from best option for businesses, especially larger ones. Any money saved on not using specialist expense management software will be lost through time spent by employees and administrators using this process. Furthermore, spreadsheets are very prone to user error, with a digit or calculation in the wrong place causing much larger problems.
● Accounting software
When it comes to accounting software, these come in all shapes and sizes and doing your own research is important to find one that’s right for you. We recommend QuickBooks or Xero, which are both well-established cloud accounting software for SMEs. Both come with a very powerful integration with Expend, which is our expense management solution can seamlessly sync your payments, expense claims and mileage claims. For example, if something changes in Expend, it is automatically updated in your accounts without the need for any manual correction. Many accounting platforms have their own expense management tools. However, the drawback with these is that some of the features will be limited and it’s likely that you’ll require an additional app with added functionality and a proven integration. These can often be found via the accounting platforms app marketplace.
● Expense management for Making Tax Digital (MTD) 2019
From 1st April 2019, VAT registered businesses with taxable turnover above £85,000 are required to use Making Tax Digital Service. Therefore, businesses must keep digital business records and send the VAT returns to HMRC using only compatible software. Expend’s fully digitalised expense management solution gives real-time review of spending not only solves the traditional expense management problems, but it also helps businesses to capture more data more accurately to ensure you’re compliant. HMRC has also provided a range of digital services and support for businesses for Making Tax Digital (MTD), which can be found here.
Additionally, from the beginning of your business, you should organise proof of transactions like receipts and other important records. If you’re not sure, then seek advice to understand more about your expense categories for taxation purposes. Keeping receipts can be a daunting task for everyone, but expense management solution like Expend can simplify the process by managing the transactions instantly as they happen with intelligent workflows and receipt management. Expense tracking can never be this easy with Expend- we also support simultaneous integration with most accounting software depending on your business and eliminate the need to do manual reports.
Explore how Expend has helped businesses across the UK with our all-in-one spending and expense management solutions here.