8 tips for small businesses, by NP&US Accountants LTD

Starting and running a small business is exciting, but managing finances—especially tracking expenses—can feel overwhelming if you’re new to it. Keeping a clear, organized record of your spending is essential for maintaining cash flow, staying within budget, and making smarter financial decisions. Good expense tracking doesn’t have to be complicated or time-consuming; with the right strategies, you can easily keep your business finances in check. 

Accountant experts, NP&US Accountants LTD, provide us with eight practical tips to help small business owners simplify expense tracking, save time, and gain better control over their business’s financial health. Whether you’re just getting started or looking to improve your current methods, these tips are tailored to make bookkeeping easier and more effective!

1. Utilize a Dedicated Business Expense-Tracking App

• Why: Expense-tracking apps streamline your financial management and are designed to make tracking easy on the go. Apps like Expensify, or Dext allow users to capture, categorize, and organize expenses directly from a smartphone, so it’s simple to stay on top of things wherever you are.
• How to Get Started: Choose an app that integrates with your existing accounting software, like QuickBooks or Xero, for automatic synchronization. Start by categorizing common expenses and configuring the app to assign recurring expenses to those categories. This approach saves time, ensures all your expenses are recorded correctly, and creates a secure digital record accessible at tax time.

2. Automate Recurring Payments and Expense Categories

• Why: Recurring expenses like rent, utilities, and subscriptions can quickly add up. Automating these payments and assigning them to predefined categories ensures that they’re consistently tracked, saving you time and avoiding potential late fees.
• How to Get Started: Set up automatic payments through your bank or accounting software for any recurring bills. In most accounting platforms, you can also create “rules” for categorizing certain transactions—so, for example, software subscription fees are always filed under “Software & Tools” without any additional manual work. Review your categories each quarter to ensure they align with any new expenses.

3. Use a Business-Only Credit Card for Purchases

• Why: Keeping a dedicated business credit card for all business-related purchases separates personal and business finances, which is crucial for accurate bookkeeping. This approach simplifies tracking, minimizes errors, and provides clear financial documentation in case of an audit.
• How to Get Started: Open a business credit card with your bank (many UK banks offer cards specifically tailored to small businesses). Use this card exclusively for business expenses, and avoid mixing personal purchases. Many credit card companies also provide detailed monthly and yearly statements categorized by spending type, which can be a huge help at year-end and tax time.

4. Digitize and Store Receipts Immediately

• Why: Physical receipts can be lost or damaged, leading to potential tax deduction losses. Digitizing receipts immediately after purchase ensures they’re securely stored, organized, and easily accessible.
• How to Get Started: Use an app like Dext or Google Drive to store digital copies of receipts. Dext, for instance, can scan receipts and categorize them in real-time, while Google Drive lets you create a folder system. Make it a habit to snap a photo of every receipt as soon as you get it, especially for tax-deductible expenses like travel, meals, or supplies. Set up a regular review day each week to categorize any outstanding expenses to keep your records up-to-date.

5. Establish a Weekly Expense Review Routine

• Why: Regularly reviewing expenses keeps your finances organized and prevents overlooked or forgotten expenses from piling up. A weekly review allows you to spot irregularities, track spending patterns, and adjust spending as necessary.
• How to Get Started: Dedicate a set time each week for a quick financial check-up—ideally, when you’re already in work mode (e.g., Friday afternoons). Log into your accounting software, categorize any unassigned expenses, and check for any discrepancies between your bank statements and recorded expenses. This small habit can save hours of work at month-end and makes it easier to keep accurate, updated records.

6. Set Up Alerts for High or Unusual Expenses

• Why: High or unexpected expenses can strain a small business’s cash flow. Setting up alerts in your banking app or software can help you quickly identify and assess these expenses, helping to avoid budget shocks.
• How to Get Started: Use your bank’s alert settings to trigger notifications for transactions over a certain amount or for unusual spending patterns. For example, set an alert to notify you for transactions over £500 if that’s a significant expense for your business. Many accounting platforms also offer customizable alerts for spending thresholds in specific categories. These alerts provide an instant snapshot and let you address potential issues immediately, helping you stay on budget.

7. Implement Monthly Budgets by Expense Category

• Why: Allocating budgets for categories like “Marketing,” “Supplies,” and “Travel” helps you monitor spending and ensures you’re investing in the right areas of your business without overextending.
• How to Get Started: Set up budgets in your accounting software—most tools like Xero and QuickBooks allow you to set limits per category. Review last year’s spending data to set realistic budgets that reflect seasonal trends and business growth. Track these budgets monthly to see if you’re consistently over or under-spending in certain areas, and adjust as needed. Having a clear budget lets you optimize cash flow, ensures efficient spending, and makes it easier to plan for future growth.

8. Use Detailed Monthly Expense Summaries to Gain Insight

• Why: Monthly summaries provide an organized breakdown of expenses, allowing you to understand your spending patterns, identify trends, and spot areas for cost-cutting or increased investment.
• How to Get Started: Generate monthly expense reports within your accounting software, focusing on high-spend areas or new categories. Reviewing these summaries helps you assess where expenses are concentrated, determine if they align with your goals, and identify potential areas for cost savings. For example, if marketing expenses are high but customer acquisition is low, it might be time to reevaluate your strategy. This insight-based approach can significantly improve your financial planning and decision-making.

Cost control brings success

Efficient expense tracking is a cornerstone of any successful small business. By implementing these smart strategies, you can simplify your financial management, avoid costly mistakes, and make more informed decisions that support your business’s growth. Staying on top of expenses doesn’t just save you time and stress; it also helps ensure your business remains financially healthy and compliant. Remember, the more organized your finances, the clearer your path to profitability. With these tips in place, you’ll be well-prepared to focus on what you do best: building and growing your business!

Meet the accountant experts: NP&US Accountants LTD

NP&US Accountants LTD is a UK-based firm with over 18 years of experience, offering tax advisory and a broad range of professional services. With deep expertise in cross-border tax issues, NP&US has become a trusted partner for both local and international clients, providing them with strategic insights and a competitive edge. Serving a diverse client base that includes multinational corporations, mid-sized companies, and high-net-worth individuals, NP&US supports clients across all sectors of the economy.

As an entity supervised by the Institute of Chartered Certified Accountants of the UK (ACCA), NP&US delivers a full suite of services tailored for new and established businesses, including self-assessment for sole traders, company formation, bookkeeping, statutory accounts preparation, payroll, VAT registration, tax planning, and more. With a client-centred approach, NP&US is dedicated to guiding businesses through every step of financial management and compliance.

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