is small expenses claim a worth

Does accountancy software technology help businesses claim more expenses?

Do expenses feed into the issue of compliancy

A survey recently carried out by YouGov among freelancers/contractors and small businesses uncovered a startling fact about expenses: only one in five of 500 respondents said they claimed back all the expenses they incurred for their business. The poll revealed that 21% of respondents claim less than half their business expenses; 10% admitting they claimed "hardly any" or none of their expenses.

Unbelievably, 25% of respondents said they couldn’t be bothered claiming an expense if it cost up to £5; a further 19% said they couldn’t be bothered to claim anything worth up to £10. This all adds up … the treasury must be doing very nicely from unclaimed expenses!

Of these respondents, 37% gave their main reason for not claiming back certain business expenses, as they thought it was not worth claiming for small sums. Other reasons included losing or forgetting receipts, not wanting to face the work involved in adding them, and worrying that HMRC would challenge them.

Do expenses feed into the issue of compliancy?

In business, surely, the issue is not whether an expense is worth claiming, but that the expense is incurred while doing business. Therefore, if it is a legitimate business expense it should be recorded as part of the accounts of the business. It’s an issue that feeds into compliancy – if business owners think that not accounting for a small business expense is okay, then what’s to stop them deciding that a small invoice is okay to leave off the books too?

Does technology help with compliancy?

Cloud-based accounting software technology definitely does support compliancy: for a start, it can protect you against accusations of non-compliancy; your records are there in real time ready to be scrutinised. Secondly, the software should prompt you as to whether the expense is legitimate. Third, you will be less likely to lose receipts, because they can be uploaded via any device, smart phone, tablet, and computer, to the system. Fourth, spending twenty minutes each month with receipts and invoices and checking bank statements you learn to see the bigger picture, just like an accountant. No self-respecting accountant would for a second think on the lines of whether a 50 pence expense is worth recording. A legitimate expense is legitimate, regardless the size of the receipt. Thus, online accountancy software designed by accountants will help you gain this sort of objective disciplined approach to recording expenses, easily and efficiently.

How invoices, expenses receipts, wages bills, etc. are better dealt with in real time

An accurate record of all expenses and all the income in real time gives businesses control and power. A month on month set of figures, a year on year, it is this larger picture that can influence your business’s profit or loss at the year’s end and the means by which your accountant can start tax planning.

There are many, many advantages to using online accounting software, including:

Compliance: What should be filed, when; what income is taxable and which expenses are deductible? The software should guide you on this.

  • Budgeting: Accounting software allows client and accountant to work together, it can assist in the creation of budgets, the development of reasonable estimates, determine drivers behind revenue and expenditures, etc./>
  • Internal controls: Payroll, cash receipts, payments, petty cash, separation of duties, etc., all this can be managed via the software.
  • Financial systems: accounting software feeds into internal controls to help you run your business more efficiently.
  • Financial statements: Preparation of financial statements may be required for management purposes or financing, online software can generate this at the press of a button.

Does accountancy software technology help businesses claim more expenses?

Working with an accountant that offers online accounting software will help you to think more like an accountant. "In our experience, our cloud-based bookkeeping and accounting software helps clients build good habits," says Sumit Agarwal, Managing partner of DNS associates and co-creator of its in-house accounting software. "DNS clients are coached to spend 20 minutes each month detailing their invoices, expenses, and responding to any emails from their account manager, all from our free accounting software system."

It seems that accountants worth their salt these days should be offering clients an online accounting system to help in the drive to pay less tax and increase profits, compliantly. Recording all expense receipts, big or small, is part of this drive. Technology helps business owners stay on top of their expenses and it should guide them when it comes to deciding whether they are legitimate expenses or not. Accounting software systems not only protect business owners against non-compliancy, but also promote business growth.

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About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.


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