Blog 4 Fantastic Ways To Manage Expenses

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4 Fantastic Ways To Manage Expenses

Although expenses are fantastic in terms of tax efficiency, keeping on top of them can prove difficult. There’s just so many different types: accommodation, clothing, entertainment, travel, subsistence, printing… and the list goes on.

You don’t need to spend time scrambling for receipts, though. It’s easy to manage your business expenses if you put the right processes in place. We’ve put together four fantastic solutions that will help you master expenses management.

1. Open a specific account

Expenses paid by multiple accounts, or from a personal account, can be hard to keep track of. To combat this, create a specific account for expenses. This will result in a sole location for bank statements, and the costs will be much easier to spot.

You may have fixed expenses, like rent, and then occasional expenses such as staff uniforms. If the variables cause difficulty with the readability of the expense account, then you could create another separate account. This distinguishes between the expenses for the overall company, and those for staff such as paying for a hotel. Additionally, it’ll help to ensure there’s enough money in each account.

2. Set limits for employees

Although opening a specific employees’ expenses account would hopefully not result in any overspending, this isn’t always the case. The overdraft on your expenses account may be dug into without you realising until the next bank statement. Or perhaps employees spend their personal money, and leave you with receipts detailing hefty amounts.

To combat this, set cost limits on the expenses they require; and you’ll need to be reasonable. Avoid travel at peak times (this can be quite pricey) and ensure staff don’t pick expensive hotels when they’re working away.

3. Buy from vendors in bulk

Maybe you’ve noticed there are multiple transactions for the same expense each month. This not only makes managing them more effortful, it’s probably not cost-effective either. To solve both these issues, ask your vendors if it’s possible to order in bulk.

Although it may seem like overkill to order, say, 100 packs of paper, you’ll need them eventually. Just remember to take into account your storage space – you certainly wouldn’t want anyone tripping over stock!

Also ensure that your vendors provide quality products or services – if they’re a new supplier then maybe it’s not worth buying in bulk just yet.

4. Use accounting software

Even with expenses in separate accounts, limits in place, and bulk purchases, keeping on top of them can still be difficult if the claiming process isn’t organised. However, accounting software can solve this.

Rather than attempting to find email chains where staff requested and claimed business expenses, these transactions can be easily located by using online software. Also, if an employee tries to claim for an expense that’s not business-related, then there’s the option to approve or decline it quickly. Instead of storing receipts, staff can take photos of purchases and simply add these to their claim.

This software is made even easier when it can be used on the go. With Bright Ideas Accountancy, we use Xero software which has an app available. However, even with access to software, those who aren’t expert accountants may understandably struggle with the tax side of things.

Therefore, if you have any questions about expenses or any other aspects of accountancy, then speak to us. You can get in touch by calling 0161 669 4221, emailing info@biaccountancy.com, or filling in our online contact form.