Why?

For sole traders and small business (typically 2-10 employees) expenses can represent a significant part of the cost structure. Often the distinction between business and personal expenses can become blurred and failure to manage and reclaim all expenses can lead to situations in which both personal and business tax positions are unsatisfactory.

Everyone is familiar with the problem – the growing bundles of receipts in wallets, pockets, drawers – not enough time, not enough priority and eventually there’s a carrier bag full, a VAT period has slipped by and expense management has gone out of the window.

If expense management is a little like going to the dentist, failure to manage expenses for a sole trader or small business eventually ends up as serious toothache.

There are three golden rules for expense management: –

• Learn what you can and cannot claim and the simple rules on tax allowability

• Do your expenses regularly – monthly as a minimum. Weekly, if the volume is high. Stay in control at all times – you will lose money if you don’t

• Retain all receipts and vouchers. They are your friends and vital to your financial wellbeing. Keep them in a safe, secure place

Expense management can have a big influence on the success or failure of a company and, the smaller the company, the more blurred the distinction between personal and business expenses.