Many small business owners find tracking their business expenses difficult, but maintaining accurate accounts is extremely important. Your accounts should be up to date and backed with all your business’s income and expenditure records. The experienced accountants in Haywards Heath can help you to maintain your book of accounts accurately.
Reasons For Tracking Business Expenses
- Helps in Controlling Cash Flow: cash flow is the total money flowing in and out of your business. The objective is to maintain a positive cash flow. If cash flow is excess, you have to do everything in your power to manage it efficiently to avoid falling into the trap of having too little. You can do this by tracking your daily expenses to manage your money efficiently throughout the month and avoid witnessing expenses outstripping income.
- Encourages Responsible Spending: When you track your business expenses regularly, you control your cost. You keep an eye on where you are spending your money. This process makes you financially aware. You eventually fix and improve your spending pattern. You will save money and free up cash that you can use in other important business areas.
- Better Prepared for the Tax Season: Tax season is the most stressful for the ones who aren’t prepared for it. Struggling to find invoices and business receipts on laptops or files is quite common for such people. But you can avoid this scenario by keeping meticulous records. You don’t need to be concerned then about whether you are losing money. In fact, you could get your money back as several expenses are allowed for a tax deduction. Here are some examples of tax-deductible expenses:
- Cell phone and internet costs
- Business lunches and meetings
- Bank fees
- Necessary professional services fees
- Office supplies such as stationery
- Travel expenses, e.g., fuel to attend a client meeting
- Dues
- Gifts
- Rental payments
- Advertising and marketing
- Home-office expenses
- Charitable contributions
- Business Insurance
However, you should remember that you will only get money back when you have tracked, categorised and disclosed these business expenses.
- Quickly Determine About Business Profitability: Finding how’s your business doing is important to determine its performance. It depicts whether you are earning money, helps attract investors, and gets loans. Daily expense tracking also helps you to avoid making educated guesses about your business profitability. You can quickly track expenses and income to learn your profitability without digging through records.
- Helps in Keeping Employees Happy: Your team will most likely send you receipts for travelling expenses, meals and other related expenses. Accurate expense tracking also helps you to promptly reimburse their expenses without any delays. They feel happier when they don’t have to keep asking you or reminding you over and over again about the expenses they submitted more than a month ago.
Meet The Experts
A lot of small business owners find it difficult to track their expenses and income when they record all this information manually. You can use computerised tools to keep all your business records just a click away and avoid the hassles of finding information from a pile of files. A manual approach also increases the chances of losing receipts and also makes filing tax returns more time-consuming. At Michael Finn & Company, we provide a range of financial services for large or small businesses with qualified accountants in Haywards Heath. Contact us today for more information.
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