Keeping your finances organised is critical for any growing business. It helps control costs, plan budgets, and make smart money decisions. You gain clear visibility into what’s being spent and where. This understanding uncovers wasted funds or opportunities to improve profits over time. It also provides credible evidence when seeking loans for expansion like unsecured small business loans.
Your track of all expenses, big and small, is the foundation for understanding your company’s financial health. It uncovers fat you can trim today or investments you make for the future.
Some tools and processes bring structure without much overhead once set up. When the time comes, they position you for growth opportunities like unsecured small business loans or lines of credit.
Use Accounting Software
You can simplify expense tracking and reporting by using accounting software. The software does the categorization automatically, saving you time. They also let you run financial reports quickly, so you always know where your working capital stands.
Accounting software takes care of tasks like:
- Importing bank transactions to track spending
- Categorising expenses (office supplies, utilities, etc.)
- Creating historical reports to analyse costs over time
- Calculating tax deductions and preparing filings
- Monitoring working capital – the money available to cover everyday costs
The right software also gives you mobile apps and cloud access. So you can pull up financial data anytime on your phone or tablet. It keeps everything updated automatically across devices.
The software reduces the time spent on bookkeeping. This frees up weekly hours to focus on customers and grow your business.
Separate Business and Personal Accounts
Keeping your business finances separate makes expense tracking easier. You can open dedicated accounts for your company’s working capital and transactions. This approach helps in a few key ways:
- It lets you quickly filter bank statements for business costs. You don’t have to weed out personal items.
- Come tax time, everything is cleanly separated. Your accounting software (like QuickBooks) can run straightforward reports.
- If asked, you can show separate accounts during financial reviews. This gives a clear picture to banks, investors, and tax agencies.
- Expenses don’t accidentally mix together. For example, you won’t reimburse yourself twice for a client dinner.
Setting up distinct accounts avoids hassles like:
- Spending 2 hours/month sorting personal charges from business expenses
- Scrambling to explain blended transactions to an investor
- Being unsure what deductions vs personal spending
Taking a few minutes upfront to open new accounts saves you major time and headaches later. Accounting clarity helps you make smarter decisions as you grow your business, too.
Use Expense Tracking Apps
Mobile apps make it easy to stay organised while you’re out spending for business. Expense trackers let you log costs right as they happen. Tags and categories keep everything sorted.
Helpful features include:
- Instantly capturing receipts by just taking a photo
- Adding details like vendor, amount, and category
- Linking expenses to specific projects or clients
- Building reports filtered by tags, timeframes, and more
So when you buy a train ticket for a client meeting, you can quickly:
- Photograph the receipt
- Log in it to the app with the client’s name
- Categorise it as “Travel”
This real-time tracking means you don’t have to sort through piles of papers later. The apps integrate with accounting software, too. One click exports your organised expenses into the software.
Expense apps save time over tracking everything manually in spreadsheets. They provide the details (like photos and tags) needed for accurate financial reporting.
Create a Budget Plan
Making a budget keeps your finances on track as your company grows. It helps you allocate working capital wisely across key areas. Building a budget plan assists with money management in a few key ways:
- It sets limits and guides smart spending. For example, you might budget £500 monthly for software services. This avoids overspending.
- Reviewing budgets shows where you over or underspend every month. You can adjust and refine figures over time.
- Comparisons to past periods reveal trends. For example, utility bills may be spiking undesirably higher.
- It assists in financial planning around loans, investments, new hires, and other decisions. You can model different scenarios to inform wise moves. For example, you might forecast whether a £10,000 small business or working capital loans in the UK allows hiring a critical new employee.
A budget provides structure, surfaces insights, and supports growth planning. It takes some upfront effort, but it repays that many times through wiser spending and financial management.
Implement a Receipt Management System
Going digital with your receipts makes expense tracking way easier! Taking photos of receipts on your phone and storing them online lets you access them from anywhere. No more fumbling through piles of paper.
Tools like Dropbox or Google Drive let you upload receipts and share them with your accountant. The files stay linked to costs logged in accounting programs. This makes tax time smoother when you need to show invoices, bills, etc.
Digital tracking helps catch mistakes, too. Accounting tools can match receipt details automatically. This prevents someone from typing numbers wrong. It’s easy to catch missing receipts for big purchases, too, before an auditor asks later!
Digital receipt collections stay organised and accessible 24/7. Setting these systems up is super quick but saves hours of paper filing each week. And you prevent headaches during tax season.
Reconcile Bank Statements
Comparing your expense records against monthly bank statements is important. This catches any mismatches early before problems grow. Reconciling accounts helps in big ways:
- It spots mistakes in your expense tracking or bank data. Maybe a meal receipt went missing, or a fee was posted twice. You find issues fast.
- You validate that money balances match on both sides as expected month-to-month.
- Digging into every transaction builds familiarity with your finances. You learn what is “normal” or not.
To reconcile, gather bank statements and your income/expense ledgers. Compare transactions row by row for inconsistencies over 30-60 minutes. Investigating anything odd right away keeps everything accurate.
This routine verification gives confidence that the financial picture is precise. Errors that could cause real headaches later get picked up quickly if revenue, purchases or fees don’t align.
Establish a Reimbursement Policy
Having clear rules for employee expense reports makes everything smoother as your team grows. You can create simple guidelines covering:
- What costs are allowed – travel, office goods, etc?
- Spending limits per employee level
- The forms and process to claim money back
- Needed proofs like receipts
- Who approves payments, and when
This clarity helps both staff submit reports and finance admin handle them. Employees know what’s expected for reimbursement, and administrators can quickly validate claims against the policy.
Make sure rules align with your accounting system, too. For example, label expense types like “Office Supplies” or “Software”. This helps auto-tag transactions when approving payments.
Conclusion
Putting in place good systems to track expenses takes effort first. But it really pays off down the road. Staying organised saves hours every week and makes big finance stuff less stressful when the time comes.
Paperwork is boring to most, but keeping your costs and receipts clear makes your business thrive. Logging spending right feeds your accounting tools. This data helps make smart money decisions later.
You can take a bit of time now to build strong money habits. Go digital with receipts, open accounts just for the business, and check it all out, even if finances aren’t your favourite. Doing the proper leads to more time and clarity to grow later. It shows future investors you use money wisely, too, when you ask for funding.
