How small businesses can track company finances and expenses

As a business owner, you will embrace a fusion of roles, from company bookkeeper, director, and marketer, to social media manager, event planner and publicist. Although your core specialisms will lie in product production or service delivery, you will also oversee the financial performance of your company to keep the health of the business in check.

A successful business operates at the height of financial efficiency, with a balanced hand on company expenses and an informed one when negotiating with suppliers and sealing the deal with customers. This can be scored through a combination of strategic financial reporting and tax planning to make company money go further.

If you’re embracing a DIY approach or financial reporting is under the care of an accountant, you’ll need to understand how to best track transactions, produce invoices and claim tax relief. Cloud accounting software is an indispensable tool and low-cost, making it an essential investment for small businesses with limited time, capital, and people power.

The role of digital accounting in a small business

Running a small company can be extremely profitable and rewarding if the management of the business is streamlined to cut out any unnecessary time crunching numbers, collecting records, and querying transactions.

Cloud accounting software houses all company information under a digital roof and provides access to intelligent features to track the financial health of your business from anywhere, and at any time.

Daily admin: Create invoices using handy templates, run payroll, track cash flow, flag overdue payments

Taxation: Prepare VAT returns, self-assessment, and file reports directly with HMRC

Integrations and special features: Bridged access to HMRC, integrated bank feeds, on-the-go stopwatch to time billable hours and automate invoices/timesheet reports

Reporting: Company overview through mobile and desktop dashboard, access to cash flow projections, audit trail, transaction, and trial balance reports

Integrating cloud accounting software provides a direct route to your accountant’s dashboard, cutting out needless email chains and impromptu calls.

It automates simple, yet time-consuming tasks, such as chasing payments, setting payment reminders, and keeping tabs on the company balance sheet. Industry-standard accounting software also bridges access to HMRC which makes submitting financial records a breeze.

Track expenses on the go

Daily admin involves tracking company expenses, for which your accountant will offer advice on the corresponding tax treatment and tax relief. Most technology-driven accountancy software will provide access to automated expense management systems to make collaborating with your accountant easier.

FreeAgent – Snap a picture of your out-of-pocket expenses and upload directly to your FreeAgent account. Categorise and set as recurring to support accurate cashflow projections. Record mileage using HMRC’s allowable rates and replicate this for small business employees.

QuickBooks – Upload receipts through your mobile to your QuickBooks account. These will then be matched with the relevant transaction and automatically categorised. Collaborate with your accountant with in-app messaging to address expense-related queries.

Xero – As an alternative to Sage, Xero can effortlessly digitize your receipts and log mileage, promoting a paperless approach to expense management. This software allows you to not only upload receipts and record mileage but also facilitates the approval of claims and meticulous monitoring of employee expenses based on their status, designated accounts, and associated projects.

Recordkeeping is essential when claiming expenses as HMRC may request to see evidence at the end of the tax year. You must retain company receipts for up to three years from the end of the tax year that they relate to, which is made easier thanks to the digitisation of the process.

Popular accounting software adheres to high digital standards and protects company data by using the same graded security used by leading banking institutions. With peace of mind comes streamlined admin and a no-nonsense approach to managing your business.

If you’re looking to find a local accountant in Swansea, Handpicked Accountants is a nationally recognised platform for small businesses on the hunt for a reputable accountant.