Financial Management Essentials | #1

Keep receipts

You’re probably thinking that’s a bit of an obvious tip. Our suggestion is actually more so around how to keep your receipts.

If you just want the take-home message, scroll to the bottom. If you have three minutes to spare, read on for a little extra.

We highly recommend acquiring an app which allows you to take a photograph of the receipt so you can evidence that purchase of a 10-pack of biros from nine months ago without scrabbling through a drawer of miscellaneous items: pens, paperclips, blue-tack, instruction manual for the oven, elastic bands, pennies… you know the one.

What apps do we recommend? There’s a bunch of “receipt bank” type apps available for iPhone and Android that provide a simple storage facility for photos of your receipts – “Scanner App” is a good option.

Our ideal recommendation to you, however, would be to invest in an accounting software that allows you to photograph your receipt and subsequently allocate the purchase to a specific expense category. For example, after purchasing your awesome new stationery from Paperchase, take a photo of the receipt and allocate the expense to “Office Expenses”. This will make things a lot easier when it comes to your tax returns at the end of the year and, of course, proper financial management is critical to business success.

In terms of an app that hooks into an accounting package, we whole-heartedly recommend Xero – it is what we use for all of our clients and our own business. The starting costs are lower than you’d expect for an accounting software – £10 for a basic package (there are even cheaper options but they are pretty limited and we wouldn’t recommend them for most sole traders and small businesses).

Of course, if you have little-to-no financial experience you may be hesitant to invest in an accounting software and, for you, we would recommend hiring an accountant to help out. Considering whether or not an accountant is for you? Check out this article for five reasons to outsource to an accountant.

TAKE-HOME MESSAGE

If you take only one thing from this article, go to the app store, download “Scanner App” and store your receipts digitally. We are in the digital age people and that goes for your receipts too.

Thanks for reading and be sure to come back tomorrow for tip #2.

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