Keeping track of business expenses can be a nightmare. If your job or business involves you travelling you will be all too familiar with the scenario. All those little receipts that build up for purchases of fuel, snacks and meals when travelling to customers or during the course of work start to stack up.
Dealing with receipts
Everyone deals with them differently from stuffing them in your wallet or handbag, filing up your glove box or putting them in an envelope to keep them in a safe place, we all have our method of ‘keeping them safe’ however that is often the problem. A recent study highlighted that almost half (45%) of those workers surveyed used their own money to pay for business expense and forgot to claim it back, losing out on £104 a year on average.
If you are a small business owner and lose receipts then you are not only out of pocket but you will also not get a deduction against profit and therefore pay tax on the amount of lost receipts. If you are large enough to be VAT registered then this makes matters worth as you will lose out on reclaiming the VAT paid.
Credit/debit card receipts
Lets take a look at another situation. If, for example you have a business credit or debit card then you will know that you have incurred expenses as they will be debited from your bank account. If you lose receipts from items paid by debit or credit card you then have the problem of justifying the business expense and also again the issue of being unable to claim the VAT back as you do not have a receipt to verify the purchase made.
These type of receipts are not isolated to travel type expenses, they can be for everyday purchases such as tea and coffee, cleaning products or stationery, the list is endless.
Business expenses often include the claiming of mileage where business owners or employees use their own vehicles. The current approved mileage rates for business mileage is 45p per mile for the first 10,000 miles per year and 25p per mile thereafter. So a 100 mile business trip using a personal vehicle is worth £45 to the individual. Forgetting to put in a mileage claim would be a costly oversight.
Now that we have discussed the subject of keeping records there is the process of recoding the expenditure in the business accounts. You may complete a spreadsheet on a weekly or monthly basis recording your transactions and business mileage. This would then be entered into the business books and records, approved where necessary and paid.
Making the process easier
It is possible to make the whole process of keeping track of business expenses easier with the use of apps and services. We have highlighted some of our favourite below which you may want to look at further depending on your needs.
Our bookkeeping software of choice at More Than Bookkeepers has a great iPhone and Android app that makes capturing receipts easier work. The app has a built in feature which allows you to use your mobile to take pictures and store them in the app for you to process your expenses from. Â This helps reduce the risk of losing your receipts and also provides a prompt for you to make an expense claim next time you login to the main version of Xero.
Taking things one step further, Receipt Bank allows you to upload receipts (and invoices) direct to their software where they will save a copy of each receipt to PDF for later viewing and also capture the data ready for it to be posted straight into your accounting software of choice.
Think about the scenario. You are out buying a coffee, take a picture of the receipt and send if to Receipt Bank, a couple of days later (or sooner) Receipt Bank will have taken all the information off the receipt such as the date, what you purchased, cost and any VAT applicable and stored it in a format ready for you to push into your accounting software. Link it us with something like Xero and you will no longer need to manually enter this receipt, then it will be a simple case of matching it against the bank transaction if paid for by card or against the appropriate account if paid for by cash.
If you travel a lot with your business then Trip Catcher is for you. Using their app you can record all your business mileage and have it ready to claim back through expenses. Link with the likes of Receipt Bank and Xero and you can push this information straight through to your bookkeeping software ready to claim back the miles travelled.
The above are just a few ways you can make your life easier when it comes to keeping track of business expenses.
Get in touch for a chat on how More Than Bookkeepers can help you make your expenses less of a headache using the contact form below.