Keeping track of expenses can help maximise income or avoid nasty tax surprises. We look at cloud apps that make it easier.
It seems obvious that keeping track of expenses is important, yet based on our experience, it’s not always a high priority for business owners.
Failing to account for all your business’s expenses not only leads you to overstate its profitability thereby inflating the income tax liability, but if the business is GST registered you’ll also be paying more GST than necessary.
If your business is the kind that charges expenses to its customers, failing to record an expense bites into your income.
And there’s always the possibility that the tax office will conduct a review or audit of your business, and that will probably go more smoothly if you have easy access to source documents to substantiate transactions.
So, it makes sense to take advantage of technology designed to easily capture all your expenses and preserve invoices and receipts.
Accounting systems may have some facilities for expense tracking, but third-party apps can improve the process, especially by taking advantage of mobile devices. At the same time, it makes sense that these apps integrate with your accounting system to minimise the need for manual entry.
Next: we compare seven cloud-based apps designed to help take the hassle out of expense tracking.