Tracking business expenses
Welcome to the second article of our series on Great business management tools for SMEs. This is where we provide you with a practical tool kit of useful information to help your small to medium business grow and prosper, particularly in the early years when so many businesses are derailed.
One of the most important things to get on top of, right at the outset, is the management of your business expenses. If you start losing track of what needs to be paid, not balancing it with what is coming in, you are heading for a disaster. So let’s look at how to successfully track business expenses.
You are not your business
From an accounting point of view anyway, you and your business should be entirely separate entities. Decide in the beginning what you need to draw from the business as a salary then keep it separate from your own finances. Set up separate bank accounts and expense cards.
Get rid of the paper
You do need to keep the receipts you get for your expenses but it is wise to purchase a receipt scanner and digitise all your paperwork, as your accounting processes will most certainly be digitised in this day and age.
Use technology to track expenses
There are excellent accounting packages available that will help you to track your expenses and income. This software can also extract and assign expenses you can claim from SARS and assist with VAT accounting (If that is applicable to you.) Consult with accounting professionals on what you can legitimately claim and assist you with tax returns etc.
Connect the Accounting package with your bank account
If you obtain accounting software with good functionality you should be able to connect it directly with your business bank account, thereby making all transactions far easier to ascertain and record. This is again why it is important to have a separate business bank account and we suggest expense card too!
Check your financial well-being regularly
Don’t just leave it to your accounting package however, check regularly to ensure that your expenses are being allocated correctly – and keep in constant touch with your checks and balances, so you know the status of your business’s financial health at all times.
Don’t fall into the cash flow trap!
Regardless of how well you track your expenses and monitor your income, if the income is not being received in alignment with the expenses you will start having cash flow problems, something that has derailed many a small business.
The good news is that Finrock Capital, an expert invoice factoring business pays you a large portion of your invoices immediately and even collects the payment on those invoices on your behalf.
Finrock Capital – we can assist
These value-added services that Finrock Capital provide are, in summary, a full credit assessment and management service; sending out statements; chasing up, obtaining confirmation of and allocating payments to the relevant invoices etc.
At Finrock Capital we’re all about assisting SMEs to operate seamlessly with the right cash flow, credit assessment and collecting your invoices. Talk to us today and watch this space for more useful insights and Great business management tools for SMEs!
