Do you track and manage your small business’s expenses (operating costs) properly? To record and review your business expenses regularly will help pinpoint unnecessary expenditures, cut costs and be prepared for tax time.

In order to improve the tracking and managing of your business expenses, try these 10 tips:

1.Get automated. Accounting software like Quickbooks and spreadsheets from MS Office simplify tracking and managing of expenses. Choose the same program as your accountant or a compatible one; this will enable you to import information directly to your tax return.

2.Prepare for tax time. You should be meticulous when recording deductible expenses like use of vehicles for business, travel and entertainment, supplies and equipment, and contributions to associations and charities. The SARS website provides details on these expenses.

3.Keep business and personal funds separate. Don't use personal cash, credit cards or cheque accounts for business expenses. When you reimburse yourself or employees, make sure you debit the correct account to prevent confusion and inquiries from SARS.

4.Be careful with cash. Expenses paid from petty cash can cause problems if not properly tracked, so it should be limited. Create a cash account in your bookkeeping to track cash expenditures.

5.Save all receipts. Should you be audited, you will need receipts to back your claims. Write the purpose of the expense on each receipt. Take photos or scan the receipts into your computer to save storage space and hassles.

6.Record information immediately. Record expenses immediately to prevent them from piling up and you from falling behind with your recordkeeping.

7.Give yourself credit. Keeping track of your business expenses is much easier when you use credit cards because the statements give detailed breakdowns of your expenses. Credit cards are also much safer and more convenient than using cash.

8.Use technology. Some mobile applications enable you to track expenses and allocate them to the appropriate client or project. Find products that integrate with your existing accounting software.

9.Monitor results. Create weekly and monthly reports with your accounting software to keep track of expenses and income. Use a monthly, quarterly and annual budget based on past expenditures to align your expenses with your budget.

10.Cut the excess spending. Do you spend more than your budget allows? Do you want to make a bigger profit? Analyse your expenses and start to cut unnecessary spending.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

CMV Group of Companies

Tel : 012 991 4400
Fax : 012 991 3001
Physical: 17 Midas Avenue, Olympus, Pretoria, 0081
E-mail: info@cmv.co.za

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