Tracking your business expenses shouldn’t be a necessary evil, rather it should be viewed as the building blocks of financial health and growth. Accurately capturing and categorising your business expenses opens up a world of insights and opportunity. Dissecting historical trends allows you to prepare for the future trajectory, optimise the allocation of capital and help you learn from mistakes of the past.
Tracking business spending across all of your chart of accounts allows you to pinpoint areas of wasteful spend, or opportunities to increase spend to accelerate growth. Tracking expenses allows you to get both a macro and micro view of spending patterns. Is there a department, or individual whose expenditure far exceeds their peers, therefore likely to be engaging in wasteful spending. Keeping an eye on spiralling business costs can allow you to do a price comparison, or renegotiate contracts to get spending back under control.
Now that you understand business spending patterns of the past, you can use this blueprint to more accurately predict future trends. Providing your team with a clear forecast for future spending and how this will relate to your company growth can prove to be a real motivator and ensure everyone is rowing in the same direction.
Businesses have historically only had redundant data at their disposal when trying to make important financial decisions. Shifting towards a daily or weekly bookkeeping cadence coupled with expense related data flowing to you automatically with all supporting documents, means that you always have an up to date financial position. Rest assured that the decisions you make are based on accurate and live data.
Digitalising the expense management process can help reduce the vulnerabilities of fraud. The root cause of fraudulent activity is often the same, a legacy of inefficient paper based processes fraught with loopholes. Visibility over all expenditure in real time will allow you to pick up on something that doesn’t look right and rectify it sooner.
Regularly taking care of your business expenses means that when tax season comes creeping up, all of the heavy lifting is already done. No more late night scrambling for supporting documentation. Even better, you will never miss out on another tax-deductible ever again. No one wants to find themselves on the wrong end of the law, or be subject to late lodgement fine.
Tracking your business expenses shouldn’t be a “keep you out of jail” task. When the perception is and managed in the right way, they are your quickest way to optimising your business.