Take control of your business expenses
Out-of-pocket expenses are costs you pay out of your pocket and which your company reimburses you for. For instance, you may use your own vehicle for a business trip or pay for your train ticket to attend a business meeting in another city.
Keeping track of expenses is not an easy task. Often business owners use words such as tedious and time consuming to describe the process of sorting piles of receipts and expense reports. Today, we will give you a few tips that should help you get expenses under control.
Record expenses on the go
It’s a lot better to record expenses shortly after they occur. People tend to put their receipts in their wallets and assume that they will find time to record them later on. The reality is that you rarely find that time. At the end of the month you are likely to scratch your head and say “what was that receipt for?”
Next time you buy a meal while on a business trip, record your expense before leaving the restaurant or the fast-food outlet. It’s also a good idea to use your mobile phone to take a picture of your receipt. You can easily upload it to Keepekor another online platform that provides expense management capabilities.
Don’t mix expenses with business costs
It’s tempting to mix expenses with other business costs. After all why not use the same spreadsheet to centralize everything!
Well, when time comes to prepare your company’s tax filing, you will need a clear separation between business and personal expenses. A better organization may help you avoid getting the taxman to knock on your door.
Another best practice is to separate what you pay using your business credit card from what you pay using your personal credit or debit card. Only items paid using the latter are out-of-pocket expenses.
You don’t need to keep a bag of paper receipts
It is worth mentioning that you don’t need to keep a hardcopy of your receipts as long as you keep a digital version. The HMRC says “records may be preserved on optical imaging systems, and the originals discarded, provided that what is retained in digital form represents a complete and unaltered image of the underlying paper document. “
You can take a picture of your receipts and upload them to Keepek’s platform. This saves you space, time and helps you get organized. Your accountant will also be able to easily find the expense record if needed.
Consistency is key to success
Virtually every business needs to track how expenses evolve over time. You won’t be able to do so if you don’t record them under consistent categories.
Imagine that this week you record a train ticket under “travel” then a month later you change your mind and record another ticket under “general”. You see the point! You will quickly get overwhelmed. More importantly you won’t be able to say if travel costs are increasing or decreasing.
Defining in advance the appropriate categories and sticking with them can help you go a long way to making your expenses easier to manage.