Politics and Business
Fine-Tuned Finances: 5 Handy Tips For Accurately Logging Your Personal Business Expenses
When it comes to performing the tasks required to correctly manage your business, expenses can often be at the bottom of the list of priorities. But whilst it can seem like a mundane task, logging your personal business expenses can make our work lives so much easier. Not only that but it can make tax time relatively stress-free.
We spoke to Business Advice Specialist Group in order to find out ways of accurately logging your personal business expenses. Below are our top five tips that should make recording your personal expenses easier than ever before.
- Keep your business and personal expenses separate.
Although this may seem like a very obvious tip, this is one of the main reasons why many people find logging their expenses tricky. For example, if you use your car for both business and pleasure then how do you correctly claim for this expense? In order to correctly claim for such expenses that are sometimes unclear, it’s essential that you do your research on what qualifies as a business expense. Reading up on the subject is one of the only ways to ensure your logging your expenses correctly.
- Keep all documentation for your business expenses.
Some people think that a simple list or credit card statement is sufficient evidence of a business expense. Unfortunately, this is not the case. It’s vital that you keep all documentation for your business expenses, doing so will make claiming simple. Therefore it’s a good idea to always ask for a receipt or tax invoice for every purchase.
It doesn’t matter how big or small the purchase may be, these small expenses can add ups over time so it’s best to have the receipt as proof of purchase. It’s also wise to label your receipts with all the relevant information as soon as you receive them. This could save you hours when trying to account for your expenses at tax time.
- Get a separate account for your business and use it.
Although the fees associated with a business account can be higher than your personal bank account, having a separate account it the only way to truly keep your expenses in order. Having a separate account for your business is the easiest ways of keeping your expenses completely separate. Being able to deposit all your revenue into a separate account and make business-related payments from the same account it a great way to keeping everything logged correctly.
- Log your mileage that is related to your business.
Anytime you travel in any of your vehicles be sure to keep a record of the mileage.
The best way of doing this is to write down the the mileage or kilometre reading at the start and end of each business related journey. It’s best to keep this information in a notebook along with the date, time and location of the journey. If you keep this notepad in your you’re also less likely to forget about logging each trip.
- Keep all of your records for the tax year in one place.
A good way of keeping your expenses organised is to keep them all in the same place. Having all of your information, receipts, bank statements and any other vital information in one place will make all of your accounting a breeze. Having this information organised by fiscal year will make any accounting process quick and simple.
The five simple tips mentioned above are not difficult to incorporate into your working lifestyle. Having these good habits and dedicating a small amount of time into following these tips know will make tax time more bearable. Applying these rules into your daily routine will also make all of your accounting and record keeping so much easier.