10 Tips for keeping track of business expenses
November 10, 2021
It’s surprising how small stuff adds up: dashing into the dairy on the way to work because the lunchroom’s out of milk. Scrambling out of the taxi at the airport to catch an early flight for that business meeting. Buying a small item for working from home in your grocery shopping. Things you can forget about as you do the important stuff.
Big or small, they’re all business expenses. They’re tax deductible so retain the records for the business’ income tax return. And, as a small business owner, understand what your business expenses really are, big and small, so you can track your costs against business income.
Be aware, also, of this as a potential business risk. Small expenses frequently receive minimal attention, and this can make your business susceptible to workplace fraud. Even small losses can become a significant drain on your finances over time.
- Keep all receipts and record business expenses accurately
- Maintain a separate business account and/or a business credit card – don’t risk losing track of expenses amongst your private purchases
- Have clear policies on petty cash and any other disbursement methods you use, such as credit or debit cards or eftpos. State what they’re for and what the limits are
- Make sure your team understands all business expenses need to be accounted for, what records they need to keep and who to give them to
- Don’t give sole oversight over expenses to one person. Have another person check expenses against bank transaction reports. Review the records with your other management reports
- Use available software products like Hubdoc, Receipt Bank, Expensity to enable your purchases to import into your accounting software
For business credit, debit and eftpos cards:
- If there’s more than one eftpos card, have two people who always keep a check on these
- If practical keep the cards securely at work, rather than staff taking them home
- Have low limits on cards, or have a separate bank account with a low balance for eftpos cards
- Have a clear policy that no personal expenses should be put on the business’ cards. Incorporate it into the employee code of conduct, or ask staff who use cards to sign an agreement to the usage policy on cards
- Change authorisations and pins when staff leave to minimise the chance of fraud
Ask us about simple, effective tools for managing this in your business.
Contact us today for your no-obligation consultation.